Dive Brief:
- Seattle Genetics Inc. is paying $10 per share in cash for fellow Seattle-based biotech Cascadian Therapeutics Inc. in a deal valued at $614 million.
- The biotech is making the play to grab Cascadian’s lead product candidate, a tyrosine kinase inhibitor (TKI) that has shown promise to treat breast cancer, as well as several other cancer types.
- Shares of Seattle Genetics were down more than 3% in early morning trading to linger near $53 per share, while Cascadian jumped 69.6% to trade slightly above the $10 per share offer.
Dive Insight:
Tucatinib, combined with chemotherapy, has shown promise in early stage trials and is currently being tested in the HER2CLIMB study of HER2+ breast cancer patients with and without brain metastases.
"Tucatinib would complement our existing pipeline of targeted cancer therapies, provide a third late-stage opportunity for a commercial product in solid tumors and expand our global efforts in breast cancer. It also leverages our broad expertise and resources to advance and expand the tucatinib program for patients," Seattle Genetics President and CEO Clay Siegall.
SeaGen said during a call with analysts that it plans to study tucatinib in other tumor settings. "Beyond breast cancer, we believe there may be opportunities for tucatinib in other tumor types, such as HER2-positive metastatic colorectal cancer," he said.
Seattle Genetics will commence a tender offer on Feb. 8 for all outstanding shares and the deal is expected to close in the first quarter of 2018 after the standard waiting period. SeaGen secured $400 million in financing from J.P. Morgan Chase and Barclays. The remainder of the deal will be paid out with cash on hand. The biotech had $413 million in cash and short-term investments as of Dec. 31.
The Seattle biotech is known for its work in antibody drug conjugates (ADCs). The company pre-announced its full-year earnings, which will be formally announced on Feb. 6. Its lead product Adcetris (brentuximab vedotin) is expected to bring in $306 - 308 million in sales for the full-year 2017. Seattle Genetics said Adcetris revenues increased over 2016 largely due to volume growth, not price increases.