CytomX loses out on $264M as Pfizer exits deal
- Pfizer Inc. has scrapped a collaboration with CytomX Therapeutics Inc. after more than four years of research didn't lead to any clinical-stage programs.
- The collaboration tapped CytomX's Probody therapeutics platform to create safer and better antibody-drug conjugates that, in theory, would release cytotoxic agents specifically into tumors, sparing healthy tissues. Pfizer held the right to select four druggable cancer targets, and both companies agreed to contribute to preclinical development.
- CytomX was eligible to receive around $635 million in upfront, reimbursement and milestone payments, plus tiered royalties that could reach double digits on potential future sales. Pfizer's decision to leave the partnership, however, means the South San Francisco-based biotech misses out on $264 million, according to its most recent annual filing.
Collaborations with larger drugmakers are key to the survival of many a tiny biotech.
CytomX, for instance, gets all of its revenue from deals struck with AbbVie Inc., Amgen Inc., Bristol-Myers Squibb Co., ImmunoGen Inc. and Pfizer. And given that CytomX's most advanced candidate is only in Phase 1/2, it will likely be some time before the biotech starts raking in money from its own products.
"For the foreseeable future, we do not expect to generate any revenue from the sale of products unless and until such time as our product candidates have advanced through clinical development and obtained regulatory approval," CytomX wrote in a Form 10-K filed Wednesday with the Securities and Exchange Commission.
"We expect that any revenue we do generate in the foreseeable future will fluctuate from year to year as a result of the timing and amount of milestone and other payments from our collaborations with AbbVie, Amgen, BMS, ImmunoGen and Pfizer, and any future collaboration partners," the biotech added.
CytomX recorded revenue of $71.6 million in 2017, a more than five-fold increase from the year prior. According to the biotech, Pfizer's exit eliminates potential earnings of up to $4.5 million in license options; up to $38 million in development milestones; up to $101 million in milestone payments for the first commercial sale in various territories for up to three indications per research target program; and up to $120 million in sales milestones payments for the research target programs.
As for why Pfizer left, the bottom line appears to be that the research just wasn't panning out. From the beginning, the big pharma selected just three of the four targets included in the deal terms. The drugmaker also discontinued development of one program for epidermal growth factor receptor prior to Wednesday's announcement.
"Although we believe that our approach improves the properties of each of the [Probody Drug Candidates (PDCs)] generated during the collaboration, these PDCs did not meet Pfizer's internal criteria with respect to projected clinical and/or commercial potential to warrant further advancement in the Pfizer pipeline," CytomX CEO Sean McCarthy said during the company's fourth quarter earnings call on March 7.
CytomX shares were down 4.5% to $32.48 apiece on March 8.
Pfizer declined to provide additional color on its reasoning to leave the deal.
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