Singapore, Mar 11, 2010: French biotech firm Transgene has signed an exclusive option agreement with Novartis for the development and commercialization of Transgene's targeted immunotherapy product, TG4010 (MVA-MUC1-IL2), for the first-line treatment of non-small cell lung cancer (NSCLC) and other potential cancer indications.

Pursuant to the agreement, Transgene has granted Novartis an option to acquire an exclusive worldwide license for TG4010 and Novartis will pay Transgene a $10 million non-refundable option fee. Contingent upon the exercise of the option by Novartis and the achievement of successful development, regulatory and commercial milestones in various indications, Transgene is eligible to receive up to a total of approximately €700 million.

According to the agreement, Transgene will initially fund and retain control over the next clinical development phase of TG4010, which is a pivotal, global phase IIb/III clinical trial that Transgene currently anticipates starting by the end of 2010. This study will involve approximately 1,000 patients with MUC1-positive NSCLC who have normal levels of activated Natural Killer (NK) cells at time of trial entry[1]. The final results are expected to become available by the end of 2013.

Results from the phase IIb portion of this combined phase IIb/III clinical trial are expected to be available in the first quarter of 2012. In accordance with the option agreement, Novartis will have up to 90 days after receiving results from Transgene for this phase IIb portion to exercise its option.

Once the option is exercised, then Novartis will assume all development, regulatory and commercialization costs related to TG4010 across all indications. Besides this, Transgene will receive royalties on global sales and retain co-promotion rights in certain countries including France and China.

"We are delighted to have reached this agreement with Novartis and believe they will be an excellent partner for TG4010, given their broad expertise, experience and resources in oncology and their long standing world-class research and development capabilities in cancer immunology," commented Philippe Archinard, Chief Executive Officer of Transgene. "We believe this agreement represents the best way to accelerate development and create long term value for our shareholders. It is also consistent with the company's goal of becoming a fully integrated biopharmaceutical company as under this agreement Transgene will maintain certain commercialization and manufacturing rights. We now look forward to closely working with Novartis in order to rapidly advance the phase IIb/III development of TG4010 so that cancer patients may benefit from a new treatment option," Philippe Archinard added.