Celgene taps Evotec for oncology discovery
- One day after Celgene's stock hit a four-year low, the big biotech inked a drug discovery deal with Germany's Evotec.
- Evotec will use its preclinical discovery and development platform — including its phenotypic screening platform and compound libraries as well as associated target de-convolution capabilities — to discover new oncology drugs aimed at solid tumors.
- Evotec will receive $65 million upfront, as well as undisclosed royalty payments and milestones. Celgene will have exclusive opt-in rights to worldwide licenses for any compounds developed.
Celgene has been struggling for the last couple of years as investors push for the company to make transformative acquisitions and reduce its dependence on the blood cancer drug Revlimid.
Revlimid makes up nearly 60% of Celgene's revenues, but is expected to lose patent protection in 2022. The big biotech has been taking measures to defend its cash cow. In fact, a recent website posted by the Food and Drug Administration shows Celgene reportedly receives the most complaints from generic drugmakers trying to copy its medicines, and Revlimid is the second most cited drug.
Celgene has been trying to expand its oncology franchise in other ways. The company dropped $9 billion on the CAR-T biotech Juno Therapeutics in January. Yet, investors only saw this as a band aid for Celgene's problems.
In February, Celgene hit a major setback, receiving a Refusal to File letter from the FDA for one of its next blockbuster hopefuls, the multiple sclerosis drug ozanimod.
These setbacks have also been accompanied by a revolving door of executives. The company's COO and former head of its immunology and inflammation unit exited shortly after the ozanimod RTF. And Celgene's stock hit a four-year low, dropping to nearly $74 per share, after it was reported on Monday that its head of business development is leaving as well.
The latest deal with Evotec, which is the second between the two companies, is unlikely to be the sort of transformative M&A investors were hoping for. Celgene will need more late-stage additions to its pipeline to help ease the problems the company has been having.
Follow Lisa LaMotta on Twitter