Maxygen, Inc. said it, along with Roche, had terminated the development of its drug MAXY-alpha, which treats Hepatitis B and Hepatitis C. The company also called time to end the agreement under which Maxygen licensed MAXY-alpha to Roche.

The news follows Maxygen's announcement of September 21, 2007, that Roche had voluntarily placed a hold on the programme.

"While we are disappointed, we recognized and had advised earlier that termination of the program was one of the likely possibilities," said Russell Howard, chief executive officer, Maxygen. "Tremendous potential remains in Maxygen's portfolio and we look forward to 2008, a key year for our two lead programs, MAXY-G34 and MAXY-VII."

The MAXY-alpha programme was fully funded by Roche, with no milestone payments expected in 2007 or 2008. As such, Maxygen expects no near-term impact on its financials as a result of the termination. Upon termination of the agreement, all rights to Maxygen's interferon variant product candidates revert back to Maxygen.

MAXY-alpha was designed to be a next-generation alpha interferon for the treatment of Hepatitis C and Hepatitis B virus infections. Alpha interferon is a natural protein that is produced by many cell types, including T-cells and B-cells, macrophages, fibroblasts, endothelial cells, and osteoblasts, and is an important component of the anti-viral response, stimulating both macrophages and natural killer (NK) cells. MAXY-alpha was being developed under a 2003 agreement between Maxygen and Roche to develop novel interferon alpha and beta products for a wide range of indications.

Maxygen is a biopharmaceutical company focused on developing improved versions of protein drugs. The company's lead programme, MAXY-G34, is designed to be an improved version of G-CSF for the treatment of neutropenia. MAXY-G34 is currently in phase II clinical trials. Also in Maxygen's pipeline is a novel Factor VIIa for the treatment of haemophilia.