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Biotechs License Solid Tumor Therapy in $2.1B Deal

Chemotherapy vials

(National Cancer Institute)

10 February 2017. Biotechnology enterprise Immunomedics Inc. is licensing its enhanced antibody-based treatment for solid tumor cancers to Seattle Genetics, a developer of similar cancer drugs. The agreement can earn Immunomedics, in Morris Plains, New Jersey, as much as $2 billion in initial and milestone payments over the deal’s lifetime, plus a $57 million equity investment by Seattle Genetics.

Both Immunomedics and Seattle Genetics produce antibody-drug conjugates, which join highly-targeted synthetic antibodies with other compounds or additives to combine the targeting of antibodies with cancer-killing power of the drugs being delivered. The therapy licensed in this case is sacituzumab govitecan, code-named IMMU-132 by Immunomedics. IMMU-132 targets Trop-2 proteins that overproduce on the surface of tumor cells in a number of solid-tumor cancers and help drive tumor growth.

Immunomedics’s technology combines synthetic antibodies with cancer-killing compounds that by themselves would not be given to patients due to their toxicity. In the case of IMMU-132, an antibody called hRS7 that targets Trop-2 proteins is teamed with SN-38, a metabolite of the drug irinotecan and approved by FDA as a chemotherapy. The company says SN-38’s toxicity prevents it from being given directly to cancer patients, but when combined with an antibody like hRS7, the drug is more targeted to the tumor and safer for the patient.

IMMU-132 is currently being tested in an early and intermediate-stage clinical trial in patients with 17 different solid tumor cancers. The Food and Drug Administration assigned breakthrough status to IMMU-132 as a treatment for advanced metastatic triple-negative breast cancer, where tumors test negative for estrogen and progesterone receptors, as well as HER2 proteins. FDA also granted its fast-track designation to IMMU-132 for triple-negative breast cancer, small-cell lung cancer, and non-small cell lung cancer. In addition, IMMU-32 received orphan drug status from FDA and European Medicines Agency for pancreatic cancer.

The agreement gives Seattle Genetics, in Bothell, Washington, an exclusive license to further develop, commercialize, and manufacture IMMU-132. Seattle Genetics will be responsible for a late-stage clinical trial of the therapy for metastatic triple-negative breast cancer, as well as submitting a biologics license application to FDA for accelerated review. The companies will form a joint steering committee, chaired by Seattle Genetics, to determine further development, commercialization, manufacturing, and intellectual property strategy for IMMU-132.

Seattle Genetics is paying Immunomedics an initial payment of $250 million, plus another $50 million for negotiated economic rights to IMMU-132 outside the U.S., Canada, and EU countries. Immunomedics will be eligible for $1.7 billion in payments for achieving designated development, clinical, regulatory, and sales milestones over the course of the agreement. Immunomedics will be eligible as well for future royalties on sales of products developed from the deal. Immunomedics also can co-promote IMMU-132 in the U.S., by taking on half of the product’s sales work.

In addition, Seattle Genetics is taking a 2.8 percent equity stake in Immunomedics, buying 3 million shares of its stock at $4.90, a 10 percent premium over Immunomedics’s average share price for the previous 15 days. The stock purchase plus additional warrants that could expand the Seattle Genetics stake to 9.9 percent are valued at $57 million.

The agreement gives Immunomedics until 19 February to negotiate a better deal with another company. Should better offers come along, Seattle Genetics has the right to match those offers, and if Immunomedics decides to join with a different company, Seattle Genetics will be due an unspecified termination fee.

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