Novartis has put up $10 million and promised up to €700 million more in milestones in exchange for an option on Transgene's promising, late-stage cancer immunotherapy.

France's Transgene will hold on to control of the upcoming Phase IIb/III pivotal trial of TG4010, which is slated to get underway by the end of this year after enrolling about a thousand patients with non-small cell lung cancer. Once Novartis gets its hands on the IIb portion of the data, the pharma giant will have 90 days to decide whether or not it will exercise its option on the program. The data is scheduled to arrive in early 2012.

If Novartis decides to pull the trigger on the option--a deal structure that is growing increasingly common in drug development--Transgene will get a fee plus milestones along with co-promotion rights in a list of countries that includes France and China. Novartis will gain control of the program and take responsibility for further costs.

"We believe this agreement represents the best way to accelerate development and create long term value for our shareholders," said Transgene CEO Philippe Archinard. "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."

- check out the press release
- here's the Reuters story