This is about breach of contract/collaborative agreement between onyx and bayer.
Recently Onyx and Bayer announced settlement agreement regarding the drug called “Regorafenib”(BAY73-4506). Regorafenib is structurally similar to sorafenib except a Fluoro substitution on sorafenib moiety.
According to onyx complaint filed on May 15 2009, in 1994 Onyx and bayer entered collaborative agreement to develop cancer drugs. Under this collaboration, Onyx and bayer would develop compound which inhibits Ras kinase. Onyx began searching Ras pathway inhibitor from its own library of compounds in house and found a weak inhibitor N34213. This N34213 basic structure is the key information to develop thousand of compounds for further evaluation. Sorafenib is result of their research. Both companies have shared development cost to commercialize sorafenib. Onyx says sorafenib and its halogenated derivatives were also within the scope of their agreement and identified before termination date Jan 2000.
Onyx also alleges that bayer secretly developed fluoro substituted sorafenib without knowledge of onyx and also is broadly covered in sorafenib patent (7,351,834) itself (filed on 1999). Full complaint is available here.
Finally on settlements agreement, Bayer agreed to pay onyx royalty on sale of regorafenib.
Bayer has separately filed and prosecuting a patent application on regorafenib as selection patent (US20050038080).