Novacea, Inc. and Schering-Plough have entered into an exclusive worldwide license agreement for the development and commercialization of Asentar, a novel, proprietary, high-dose oral formulation of calcitriol, a potent hormone that exerts its effects through the vitamin D receptor (VDR). Novacea is currently conducting a large international Phase IIII trial (ASCENT-2) evaluating Asentar in 900 patients with androgen-independent prostate cancer (AIPC).

Novacea will receive an upfront payment of $60 million, including $35 million as reimbursement for past R&D expenses, a license fee of $25 million, and a commitment by SP to purchase $12 million of Novacea common stock at a predetermined price within 10 days of the closing. Additionally, the agreement provides Novacea with potential pre-commercial milestone payments of as much as $380 million, along with tiered royalties on worldwide sales of Asentar. Closing of the transaction is subject to clearance under the Hart-Scott-Rodino Antitrust Improvements Act (HSR) and is anticipated to occur following HSR clearance.

SP will be responsible for all forward development costs in exploring indications for earlier stages of prostate cancer, such as androgen-dependent prostate cancer (ADPC) and adjuvant therapy and will lead all global commercialization efforts for Asentar. Novacea will provide medical support to SP's commercial operations for Asentar in the U.S., including deployment of its Medical Science Liaisons, which will be funded by SP.

"A corporate partnership has been a significant corporate goal for 2007, and we are proud to be co-developing Asentar with a highly-respected pharmaceutical company such as Schering-Plough. The partnership leverages Novacea's existing capabilities with Schering-Plough's experienced development, regulatory and commercial teams and will provide Novacea with an opportunity to support the commercialization of Asentar in the U.S. Additionally, this agreement provides us with substantial funding for the continued development of our operations," said John P. Walker, Novacea's chairman and interim chief executive officer.

"This agreement with Novacea allows us the potential opportunity to extend our oncology pipeline into a tumor with significant unmet need," said Thomas P. Koestler, Ph.D. executive vice president and president of Schering-Plough Research Institute. "Asentar represents an innovative R&D and reinforces our continual commitment to patients."