Gene therapy company Oxford Biomedica confirmed yesterday that it was on the brink of signing a partnership deal for its cancer treatment TroVax.

If the deal goes ahead, Oxford Biomedica could become the first Oxford University spin-out company to see one of its cancer drugs launched by a major pharmaceutical firm.

The company, founded by Oxford dons Alan and Sue Kingsman, has developed a technique of introducing new genes into the body which encourage the immune system to fight back against cancer.

Chief executive, Prof Alan Kingsman, said: "Following extensive commercial discussions with potential partners for TroVax, we are now negotiating final contractual terms and, subject to agreement on these terms and final approvals, we hope to conclude a licensing agreement in the near future."

More than 150 patients have now been treated with collectively more than 500 doses of TroVax in several clinical trials, producing an anti-tumour immune response in more than 95 per cent of patients.

Oxford BioMedica began recruiting patients in a Phase III trial in kidney cell carcinoma last November 2006, and trials in bowel and prostate cancer are ongoing.

If all goes well, TroVax could be registered in the United States in 2009. In the European Union, drug regulators have recommended TroVax should be treated as an "orphan drug" for kidney cancer, since no other treatment is available.

This year the company, based at Oxford Science Park, earned revenue of £800,000, but paid out £19.5m in research costs, giving a loss of £17.6m.

Its cash balances fell to £28.5m, from £43.8m last year.

Prof Kingsman said: "2006 has been a landmark year for Oxford BioMedica, with TroVax entering phase III development that, if successful, should lead to product launch in 2009 for the treatment of renal cancer.

" We made excellent progress with our lead neurotherapy programmes as well as expanding our technology licensing activities."