Transgene is close to a worldwide partnership deal for lung cancer vaccine TG4010, bringing the French research-based biotechnology company nearer its goal of becoming a biopharmaceutical group by 2016.

Chief executive Philippe Archinard told Reuters that Transgene and its future partner were hammering out details of a licensing deal on TG4010 which has blockbuster potential and could treat other cancer types as well.

'There are no existential questions left to discuss but the devil is in the detail,' Archinard said. He declined to be more precise about the conclusion of the deal other than saying it would happen around the year-end with a 'big player' in cancer.

Analysts have named Swiss drugmakers Novartis and Roche, with whom Transgene already has a drug development deal, as well as Pfizer of the United States as possible partners for Transgene's therapeutic vaccine.

An agreement could add 700 million euros ($1.1 billion) to Transgene's coffers in upfront, milestone and royalty payments, CM-CIC Securities analyst Arsene Geukam estimated.

Transgene shares surged when the US health regulator last week said it would speed up the marketing decision procedure for TG4010, which could become a first-line treatment of advanced non-small lung cancer in combination with chemotherapy.

Usually, the Food and Drug Administration takes 10 months to decide whether a drug is sufficiently safe and efficient to be marketed, but it can shorten this time to six months if clinical study results with the drug are significantly beneficial.

As a lung cancer treatment, TG4010 could enter critical final and costly Phase III clinical trials in the second half of next year, Archinard said. Advanced non-small lung cancer is the most common form of lung tumour.

Positive mid-stage trial results confirmed longer survival for patients on TG4010 with chemotherapy than for those on only chemotherapy. TG4010 targets the MUC1 protein, which is also found in breast, prostate, kidney, pancreatic and other cancers.

Transgene develops vaccines against cancer and infectious diseases. Its technology is based on the transfer in the body of treatments with genes able to restore the capacity of the immune system to fight diseases by killing abnormal or infected cells.

Transgene's future partner also plans to take exploratory mid-stage trials with TG4010 further to see whether it works for breast, prostate and kidney cancer and possibly turn it into a rival to Roche's Avastin, which treats the same cancers.

Other drugmakers with a cancer portfolio include France's Sanofi-Aventis, which will lose patent protection next year on multi-cancer treatment Taxotere, and Eli Lilly.

The agreement, as well as other possible drug development deals, would in any case allow Transgene to achieve its goal of becoming a biopharmaceutical company by 2015 or 2016.

'Our terms are that we want to have more interaction, give Transgene a more prominent place than in the type of deal we did with Roche,' Archinard said.

So far Transgene has done research on drugs but it wants to be able to fully develop and ultimately make and market them.

Transgene will have about 64 million euros in cash at the end of 2009 and has no plans to raise capital, Archinard said.

Top shareholder Institut Merieux has no plans to change its stake in the company, he added.

Transgene plans to give a strategic update on drug pipeline developments, including hepatitis treatment TG4040 and skin cancer treatment TG1042, when it unveils the TG4010 deal.-Reuters