Amid CEO turmoil, Allarity loses rights to Novartis cancer drug over missed payments
Already reeling from the controversial termination of its CEO, Allarity Therapeutics has now been told that Novartis is rescinding the rights to a troubled cancer drug after the biotech failed to keep up with its payments.
Allarity, under its previous Oncology Venture moniker, licensed the rights to the small molecule multi-kinase inhibitor dovitinib from Novartis back in 2018. But Allarity revealed in an SEC filing yesterday that the Big Pharma had written to the biotech a week ago “indicating their decision to terminate the agreement based on material breach for lack of financial payment.”
Novartis had once touted dovitinib as a highly promising kidney cancer drug based on the strength of mid-phase data. But by the time Allarity got interested, the candidate had shown itself unable to outperform Bayer’s Nexavar in a phase 3 trial of metastatic renal cell cancer patients previously failed by anti-angiogenic therapies.
Allarity was willing to give the drug a second chance. It licensed the asset in return for an undisclosed package of upfront and milestone payments, hoping to prove dovitinib’s worth by using its DRP biomarker platform to better select tumor patients who could benefit.
By 2022, the company was forced to abandon plans to develop the drug as a monotherapy for a type of advanced kidney cancer after the FDA responded to Allarity’s application with a refusal to file letter. The biotech responded by refocusing its pipeline on combination therapies.
As part of that retooled strategy, Allarity launched a phase 1b/2 study of stenoparib, a PARP inhibitor, in combination with dovitinib for second-line or later treatment of metastatic ovarian cancer.
In the filing yesterday, Allarity said it remains “fully committed and primarily focused” on a phase 2 trial of stenoparib in ovarian cancer. The biotech reiterated that “encouraging results” were seen from the first five evaluable patients in December 2023 from that study.
With dovitinib snatched back from Allarity’s pipeline, it’s unclear whether this is the end of the road for the multi-kinase inhibitor. Fierce Biotech has asked Novartis whether it has any plans to pick up development of the drug.
The loss of the dovitinib license isn’t the only drama at Allarity. The company first revealed in December that CEO James Cullem was leaving the company. In yesterday’s filing, Allarity explained that Cullem had been fired “for ‘cause’ under his employment agreement,” although Cullem has apparently disputed this rationale.
Allarity also attached Cullem’s letter resigning from the biotech’s board last week, in which the former CEO accused the company’s directors of “acts and omissions … that I consider directly injurious to the company, its shareholders and its creditors.”
“We and our continuing members of the board disagree with the claims made by Mr. Cullem in the resignation email and take exception to Mr. Cullem’s characterizations of facts and his conclusions,” the company added in yesterday’s filling.
Cullem had only been in the CEO role since June 2022, when he took over after Steve Carchedi stepped down to “pursue other opportunities.” Cullem has been replaced by co-founder and board member Thomas Jensen.