Adherex, GSK cancer deal

Adherex (ADH; TSE:AHX) in-licensed eniluracil for all indications from GlaxoSmithKline (LSE:GSK; GSK). The pharma company has a buy-back option for the compound, which previously failed two Phase III trials to treat colon and pancreatic cancer in combination with 5-FU. If GSK exercises the option, ADH is eligible for up to $120 million in milestones and up to double-digit royalties. If GSK does not buy back eniluracil, it is eligible for milestones plus double-digit royalties from ADH. ADH said based on undisclosed new data, it believes it can make the combination of eniluracil and 5-FU more effective than 5-FU alone. ADH expects to begin Phase III trials in an undisclosed cancer indication as early as 2007. ...