Seattle Genetics in $2-Billion ADC Oncology Deal

Seattle Genetics, a Bothell, Washington-headquartered biotechnology company, has entered into a development and license agreement with Immunomedics, a Morris Plains, New Jersey-based biopharmaceutical company, under which Seattle Genetics would receive exclusive worldwide rights to develop, manufacture, and commercialize sacituzumab govitecan, an antibody-drug conjugate (ADC) in development for treating cancer, in a deal worth nearly $2 billion.

Upon closing, Seattle Genetics will pay Immunomedics an upfront payment of $250 million, and would pay development, regulatory, and sales-dependent milestone payments across multiple indications and geographic regions of up to a total maximum of approximately $1.7 billion as well as tiered double-digit royalties.

Sacituzumab govitecan is an ADC targeted to tumor-associated calcium signal transducer 2 (TROP-2), a cell-surface receptor that is expressed on several tumors, including cancers of the breast, colon, lung and bladder. The drug is composed of an anti-TROP-2 antibody linked to an active metabolite of irinotecan, a cancer medication typically used to treat colon and rectal cancers. Sacituzumab govitecan is in a Phase I/II trial for triple negative breast cancer (TNBC) and multiple other solid tumors. It received breakthrough therapy designation in 2016 from the US Food and Drug Administration (FDA) for treating patients with TNBC who have failed prior therapies for metastatic disease. The FDA also granted the ADC fast track designation for small-cell lung cancer (SCLC) or non-small-cell lung cancer and orphan drug designation for treating SCLC or pancreatic cancer. The European Medicines Agency has also granted the drug orphan drug designation for treating pancreatic cancer.

Concurrent with this transaction, Seattle Genetics is purchasing approximately $15 million of common stock, representing a 2.8% stake in Immunomedics. Seattle Genetics has also been granted the right to purchase an additional 8,655,804 shares of common stock at a price of $4.90 per share for a defined period. The equity purchase and rights are not subject to closing of the development and license agreement.

The closing of the deal is subject to customary conditions, including the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended. In addition, for a limited period of time, Immunomedics has the right to continue discussions with a small number of parties that previously expressed interest in licensing sacituzumab govitecan. If a third party provides Immunomedics with a financially superior licensing offer, Seattle Genetics has the right to match any such offer, and if it decides not to match, Immunomedics has the right to accept the superior offer and terminate the proposed development and license agreement upon payment of a termination fee to Seattle Genetics.

Source: Seattle Genetics 

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