The biotech company refused to reveal the financial details of the link- up with Zeneca, which paid pounds 2m for a 4 per cent stake at the time of the float, but Louis Nisbet, chief executive, said it was part of Xenova's "enormous progress" over the past year.
He said the company's QTC libraries, which are derived from plant, fungal and microbial sources, "provide the fastest way of unlocking pharmaceutical products of interest from natural products chemistry". Because of the way they are formatted, these libraries can be shipped to pharmaceuticals companies which can use them to test potential drug targets.
Zeneca will pay an initial licence fee to use the libraries, then milestone fees for every lead it takes up and royalties on any drugs which result from the collaboration. The latest biotech tie-up is the third for Zeneca since last June, following so-called database subscription agreements with Incyte Pharmaceuticals of California and Pharmacopeia of New Jersey.
The news came as Xenova announced a small cut in losses from pounds 7.99m to pounds 7.77m for the year to December, on revenues cut from pounds 1.79m to pounds 1.59m. It started the year with pounds 27.8m net cash, including pounds 21.3m from the placing and is set to pick up pounds 2m under a deal with Warner Lambert shortly.
Separately, Cambridge Antibody Technology announced that its flotation later this month would be priced at 500p, capitalising the group at pounds 109m. The biotechnology company is raising pounds 38m, after expenses, from the placing, with first dealings expected to begin on Tuesday. David Chiswell, chief executive, said the company would use the money to develop CAT's portfolio of antibody-based human therapeutic products.
Also yesterday, Cantab Pharmaceuticals announced its anti-herpes vaccine had been well tolerated in early stage trials. The drug, which formed the centrepiece of a licensing deal with Glaxo Wellcome on Tuesday, was being tested in 24 carriers of the disease in the UK.