Lee's has licensed a Novelos compound for the treatment of cancer and one for hepatitis, each to be developed for the Chinese market, according to Novelos. The deal includes initial fees and future milestone payments to Novelos, as well as royalties of up to 25 percent on sales of the anti-cancer compound and as much as 15 percent on revenue from the hepatitis treatment. Other financial details weren't disclosed.

Novelos is developing its anti-cancer compound, dubbed NOV-002, in Phase 3 clinical trials for non-small cell lung cancer for the U.S. market. The other molecule, called NOV-205, has recently passed safety tests in Phase 1b trials for patients with chronic hepatitis C, according to the company.

Novelos reported a 2006 net loss of $8.9 million with no revenue.