RESEARCH TRIANGLE PARK, N.C. — Adherex Technologies has lost GlaxoSmithKline as its partner in the development of a potential cancer drug.

Adherex (Amex: ADH) had expected to gain as much as $120 million in payments plus double-digit royalties from GSK if the drug wins regulatory approval.

GSK decline to exercise its right to license ADH-1, which is also called eniluracil, Adherex said Wednesday. The company’s stock dropped 9 cents to 34 cents on the news.

Adherex does retain all rights to the drug and will continue its development, the company added. Adherex licensed it from GSK in July of 2005.

“We are pleased to regain full ADH-1 rights,” said William Peters, chairman and chief executive officer of Adherex, in a statement. “Our clinical development for this drug has progressed well. It has been well tolerated, shown evidence of molecularly appropriate anti-tumor activity, and new preclinical data in combination with chemotherapy are very impressive.”

ADH-1 targets a molecule that is found in advanced cancers and is seen as being critical to cancer growth, invasion and metastasis. It is now in a Phase II clinical trial,

In May, Adherex raised $6.5 million in new funding through a stock sale.