Notes from BIO: Bayer Quiet on Onyx Accusation

What to make of Onyx Pharmaceuticals' announcement this morning that it had been unable to peacably resolve a dispute with Nexavar partner Bayer over a fluorinated version of that kidney/liver cancer drug? Most observers we've talked to about it here at BIO suggest that it's one sign the broader partnership is under stress.

"That can't be good," said one biotech CEO. "You gotta wonder about the entire partnership because of this." Other biotech types agreed, suggesting that even if Bayer's activities are defensible contractually, they wouldn't reflect well on the mid-sized pharma's partnering rep.

Onyx's complaint alleges that Bayer has, outside the companies' 15-year partnership, been working in secret on a version of Nexavar identical in all ways except a fluorine atom is subbed in for a hydrogen atom. According to the Onyx press release: "The new molecule had been identified in 1998 during the research collaboration period by the companies' joint research teams. Discussions with Bayer regarding Onyx's rights to fluoro-sorafenib under the companies' 1994 collaboration agreement were not productive."

So does the fact that the long-standing partners couldn't play nice and get this settled in private suggest all is not particularly well with their alliance? We sat down at BIO with Bayer's global SVP of business development and licensing Michael Yeomans, for a broad discussion of Bayer's business development endeavors. On the Onyx situation Yeomans couldn't get specific. “I can’t say much [about the specifics of the Onyx claims] because we have not yet received a complaint yet,” says Yeomans. “ We will evaluate it once we have it. ”

“We believe that Onyx has no rights to the compound and we will defend ourselves against the complaint,” he added.

But Bayer will present Phase II data on the compound at ASCO, which perhaps triggered the Onyx announcement.