10% solution doesn't favor Tanox

A year ago, Tanox Inc. thought it had won the right to independently develop its TNX-901 anti-IgE antibody for peanut allergy after a summary judgment by the U.S. District Court for the Northern District of California. But after a series of maneuvers by partners Genentech Inc. and Novartis AG, an arbitration panel has ruled that TNOX does not have the right to develop its molecule, leaving the company with only a sliver of the potential pie, instead of the whole thing.

According to Ashraf Hanna, TNOX's director of strategic planning, the company now stands to make about a 10% royalty on potential worldwide revenues from the MAb. He noted that TNOX has yet to speak with NVS (Basel, Switzerland) and does not know the pharma company's plans for developing TNX-901. But if NVS and Genentech (DNA, South San Francisco, Calif.) were to bring the product to market, TNOX could forego $70-$80 million in Phase III development costs...