- Seattle Genetics has lined up a deal worth as much as $2 billion to acquire exclusive worldwide rights to a cancer therapy from Immunomedics, the West coast biotech announced Friday.
- Immunomedics will get $250 million upfront, with $1.7 billion in potential milestone payments and tiered double-digit royalties on potential sales. What's more, Seattle Genetics has agreed to purchase $15 million worth of the clinical-stage company's common stock.
- In return, Seattle Genetics gains exclusive worldwide rights to IMMU-132 (sacituzumab govitecan). The treatment is in an antibody drug conjugate (ADC) currently in Phase 1/2 testing for the delivery of cytotoxic drugs to various types of tumors, including breast, lung and esophageal.
Discussions of a potential deal between the companies started about seven or eight months ago, Seattle Genetics CEO Clay Siegall said in an interview, adding that the IMMU-132's strong performance in the clinic and near-term potential as a treatment for triple negative breast cancer were particularly enticing.
"It fits in strategically very well," Siegall said. "It's also an [ADC drug], which we have a lot of expertise on. We know how to manufacture them, test them, develop them, and launch them commercially, so it matched with our capabilities very well."
IMMU-132 received a Breakthrough Designation from the Food and Drug Administration back in Feb. 2016. Immunomedics plans to submit a Biologics License Application (BLA) with the agency following the completion of the Phase 1/2 study.
Siegall did not give additional details on the timeline surrounding that BLA filing.
The deal size is notable for Seattle Genetics, especially when compared to licensing agreements it has inked in recent years. While the company didn't disclose how it intends to finance the transaction, it did report $131 million in cash and cash equivalents as of Sept. 30.
The agreement has pretty great perks in lieu of the costs. Not only will Seattle Genetics hold the rights to IMMU-132, but that stock purchase gives it a 2.8% stake in Immunomedics.
Another provision of the deal gives Seattle Genetics the option to purchase about 8.7 million shares of the New Jersey-based pharmaceutical company at $4.90 per share, a total value of roughly $42 million. Immunomedics had 106 million shares of outstanding common stock as of Feb. 10, meaning that provision could give Seattle Genetics another 8% stake in the seller (in addition to the 2.8% stake).
IMMU-132 isn't guaranteed to go to Seattle Genetics, however. One of the terms of the deal holds that, for a limited time, Immunogenics can license out its drug to another party if that party offers a higher bid than Seattle Genetics' and the latter company isn't willing to match or surpass the offer.
Absent such an event, Seattle Genetics expects the deal to close by the end of the first quarter.