Clavis Pharma and Clovis Oncology Extend Partnership and Sign New $205 Million Deal

Clavis Pharma ASA (OSE: CLAVIS), the Norwegian cancer drug discovery and development company, and Clovis Oncology, Inc., announced today a new agreement for the further development and commercialisation of CP-4126 (also known as CO-101), which is currently in Phase II development in pancreatic cancer. CP-4126 is a novel, patented, lipid-conjugated form of the anti-cancer drug gemcitabine that has the potential to improve treatment outcomes in a large subset of patients with pancreatic cancer and certain other solid tumours.

Under the terms of the new agreement, Clavis Pharma will receive an upfront cash payment of $10 million from Clovis Oncology for the expansion of the agreement to include global rights and will be eligible to receive further payments totalling $30 million for the successful attainment of development and regulatory milestones in Asia and up to $165 million in sales milestones. This is in addition to the upfront and milestone payments already agreed to in the original license agreement. Clavis Pharma will receive tiered double-digit royalties on all product sales globally.

This new deal expands the existing agreement between Clavis Pharma and Clovis Oncology for the development and commercialisation of CP-4126 in the Americas and Europe, which was signed in November 2009 (up to $380 million in milestone payments plus royalties on sales).

As in the previous agreement, in collaboration with Clavis Pharma, Clovis Oncology will be responsible for the clinical development and registration filings in Asia and the rest of the world. Clavis Pharma will continue to fund some development activities.

Clovis Oncology will now be responsible for the commercialisation of CP-4126 globally, while Clavis Pharma retains an option to co-promote in Europe.

Commenting on the deal, Olav Hellebø, CEO of Clavis Pharma, said:

“We are delighted to be extending our partnership with Clovis Oncology to Asia for the development and commercialisation of our new and improved anti-cancer product CP-4126. For Clavis Pharma, this new agreement represents an important step forward to ensure that CP-4126 will be available to patients globally in the shortest possible time. Clovis Oncology has the requisite expertise in development, regulatory affairs and product commercialisation on a global level to bring CP-4126 to market and we have already established a strong and productive working relationship.”

Patrick Mahaffy, President and CEO of Clovis Oncology added:

“We are very pleased to extend our relationship with Clavis to include global rights to CO-101. We have established a strong collaboration with Clavis and believe this allows us to develop the drug consistently in Japan, China, and additional Asian and international markets. We are already planning the development of our preclinical lung cancer compound in Asia so this expansion of our agreement with Clavis is also highly complementary to our global development and commercialisation strategy.”

About CP-4126 (also known as CO-101) and Pancreatic Cancer

CP-4126 is a novel, patented, lipid-conjugated derivative of the anti-cancer drug gemcitabine, developed using Clavis’ lipid vector technology (LVT). It is designed to improve upon the efficacy of gemcitabine by enabling the drug to enter cancer cells without requiring the presence of transporter proteins. The entry of gemcitabine into tumour cells has been shown to be dependent upon the expression of specific membrane transporter proteins, particularly hENT1 (human equilibrative nucleoside transporter 1). Gemcitabine is the current standard treatment for advanced pancreatic cancer, and is also used in combination with other chemotherapy agents for the treatment of other cancers, including non-small cell lung, ovarian, gastro-intestinal and breast cancer.

It is estimated that due to deficient expression of the transport protein, hENT1, at least 50% of patients with pancreatic tumours have limited cellular uptake of gemcitabine and therefore respond poorly to treatment. This has been confirmed in several studies of patients with pancreatic cancer where a low level of the hENT1 biomarker has been correlated with poor outcomes after gemcitabine therapy and high levels of hENT1 correlated with significant better survival outcomes. Published research has also suggested that hENT1 levels correlate with outcomes in lung cancer patients treated with gemcitabine-containing chemotherapy. Due to its different molecular design, CP-4126 is absorbed by cancer cells independent of hENT1 levels, which may lead to an improvement in efficacy in the poorly-served group of hENT1-low patients.

Pancreatic cancer presents a major unmet medical need due to the poor survival outcomes and limited number of therapeutic options available to patients. Approximately 43,000 new cases of pancreatic cancer will occur in the US in 2010, with a similar number occurring in Europe. The 1-year and 5-year overall survival rates are estimated at 23% and 4%, respectively. The majority of pancreatic cancer patients are diagnosed with unresectable locally advanced or metastatic disease. Median overall survival in these advanced patients is 4-10 months. CP-4126 has been granted orphan drug designations for the treatment of pancreatic cancer in the US and EU.

Clinical Development of CP-4126

Following the phase I study performed by Clavis Pharma, Clovis Oncology initiated an international, randomised, Phase II trial of CP-4126 versus gemcitabine in mid-2010, with overall survival as a primary endpoint. The trial is progressing as planned with clinical sites opening and patient enrolment ongoing in Europe, the US, South America and Australia. Results of this trial are anticipated in 2012. While the trial is evaluating CP-4126 in patients who express either high or low levels of the hENT1 biomarker, the primary analysis will be overall survival in the hENT1-low population. If successful, Clovis Oncology anticipates filing for marketing approval in the United States and in the EU by year end 2012.

A new clinical trial with CP-4126 in second-line pancreatic cancer patients will be initiated by the end of this year, and a retrospective observational study to define the criteria for determining low/high hENT1 expression levels will begin shortly as well.

Clovis Oncology has signed an agreement with Ventana Medical Inc., a subsidiary of Roche, to develop and commercialise the novel hENT1 biomarker diagnostic method as a companion diagnostic for CP-4126.