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DEALS

Three Biotechs Secure Billion Dollar Partnerships

OncoMed, Molecular Partners, and Genmab could earn up to $6.3 billion if all the milestones are achieved.

MARIE DAGHLIAN

The Burrill Report


Partnering activity ramped up after the Thanksgiving holiday with three early-stage deals that could mean as much as $6.3 billion for the biotech companies at the receiving end. For all three deals, the total value depends on the successful commercialization of more than one program.

In one of the biggest partnering deals this year, OncoMed Pharmaceuticals and Celgene entered into a collaboration to develop up to five preclinical anti-cancer stem cell therapeutic candidates from OncoMed’s pipeline including an anti-DLL4/VEGF bispecific antibody, and its lead anti-cancer stem cell candidate demcizumab, which is in early-stage clinical testing. The deal has a total potential value of $3.3 billion and includes an upfront payment of $155 million and a $22.5 million equity investment in OncoMed’s shares.

“We may not have to raise cash again, ever,” said OncoMed CEO Paul Hastings on a conference call with investors and media after the deal was announced. OncoMed completed an upsized IPO in July raising $93.8 million. Shares of the biotech, which had been languishing, rose 97.9 percent in heavy trading after the deal was announced.

OncoMed will conduct early clinical studies after which Celgene has an option to license global rights to the experimental products. OncoMed retains global co-development and U.S. co-commercialization rights. Celgene has an exclusive option to license demcizumab during or after completion of mid-stage trials, which will be conducted by OncoMed. Celgene also has rights to small molecule compounds in an undisclosed cancer stem cell pathway.

Milestone payments through successful commercialization for demcizumab could total up to $790 million, up to $505 million for the bispecific antibody, and up to $440 million for each of the other programs, plus more than $100 million in option exercise, development and regulatory approval payments for the small molecule program.

“Through this major alliance with Celgene, we gain substantial resources that will enable us to continue to discover and develop new therapeutics independently while positioning OncoMed for substantial potential downstream value and profits,” says Hastings. “Importantly, by retaining co-development and co-commercialization rights to up to five biologic product candidates in our pipeline, we expect to add commercial capabilities to our core research and development competencies as we continue to build a premier oncology biotherapeutics company.”

Swiss biotech Molecular Partners entered into a research collaboration and licensing agreement with Roche to discover, develop and commercialize cancer drugs incorporating the biotech’s DARPin biologics conjugated to toxic agents developed by Roche.

Roche has rights to develop and commercialize several DARPin-based products. In return it will pay Molecular Partners $61.3 million upfront and research funding. The biotech could earn up to a total of $1.1 billion if all development and sales milestones are met for multiple products, plus royalties.

Genmab expanded its collaboration with Janssen Biotech to create and develop bispecific antibodies using Genmab’s technology platform. Under the new agreement, valued at up to $1.9 billion, Janssen will have rights to up to ten additional programs. Genmab will get $2 million upfront. Genmab will also be eligible for an average of $191 million in license and milestone payments for each of the ten programs that Janssen successfully initiates, develops, and commercializes, plus royalties.

“Our DuoBody collaboration with Janssen has been very productive since we signed the initial agreement in July 2012,” says Jan van de Winkel, CEO of Genmab. Molecules generated by Genmab’s platform combine the benefits of being able to bind to two different targets at the same time with the strengths of conventional antibodies, which allows the molecules to be administered and dosed as other antibody drugs.

Although it will take many years to see if these deals pay out their billions of dollars, they are still very important validations of these biotechs’ technology platforms and provide needed cash to conduct their research and develop their pipelines.



December 06, 2013
http://www.burrillreport.com/article-three_biotechs_secure_billion_dollar_partnerships.html

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