Thallion Pharmaceuticals Inc has signed a binding Letter of Intent (LOI) with LFB Biotechnologies, of Les Ulis, France, an affiliate of the Laboratoire français du Fractionnement et des Biotechnologies (LFB), for the development of Shigamabs, Thallion’s product candidate for the treatment of Shiga toxin-producing bacterial, or STEC, infection. The partnership is subject to the execution of definitive agreements which Thallion anticipates in the first quarter of 2010. The LOI provides for immediate funding by LFB Biotechnologies of costs associated with re-initiating the Shigamabs programme.

“We have always believed in the potential of Shigamabs to treat STEC infection, a serious condition for which no approved therapy currently exists. LFB Biotechnologies is an ideal partner for this program as they bring their extensive experience in the development of monoclonal antibodies and next-generation protein therapies as well as their considerable commercial and financial support that is necessary to successfully develop Shigamabs,” said Dr Allan Mandelzys, EVP of Licensing & Corporate Development of Thallion Pharmaceuticals Inc.

Under the terms of a definitive agreement, LFB Biotechnologies will receive commercial rights to Shigamabs for Europe and South America, while Thallion retains the rights for North America and the rest of world. Thallion can receive payments of up to €95 million (approximately C$150 million), which includes an up-front licensing fee of €1.5 million (approximately C$2.3 million), funding for substantially all future clinical development costs, as well as milestone payments associated with the development, approval and commercial sales of Shigamabs. In addition, Thallion will receive tiered, double digit royalties based on product sales. Thallion will retain primary responsibility for the conduct of the clinical program, whereas LFB Biotechnologies will be responsible for the manufacture and supply of Shigamabs for both clinical study and commercial sale.

A Joint Development Committee to be comprised of members from both Thallion and LFB Biotechnologies will be established to oversee the clinical development of Shigamabs. Based on a Thallion clinical protocol that had been approved previously by both the Argentinean and Chilean regulatory agencies, the companies intend to promptly initiate activities for the launch of a phase-II study in South America.

Shigamabs consists of two monoclonal antibodies designed to bind specifically and exclusively to the Shigatoxin 1 and Shigatoxin 2 toxins secreted by Shiga-toxin E. coli (STEC) bacteria.

LFB is a biopharmaceutical group that develops, manufactures and markets medicinal products for the treatment of serious and often rare diseases in several major therapeutic fields, namely Hemostasis, Immunology and Intensive Care.

Thallion Pharma is a biotechnology company developing pharmaceutical products in the areas of oncology and infectious disease.