Seattle Genetics and Immunomedics signed a development and licensing agreement on Friday that required Seattle Genetics to pay Immunomedics $250 million up front for the license of IMMU-132. The drug is Immunomedic’s proprietary solid tumor therapy candidate, which is currently in development and on course to file for accelerated approval by mid-2017. The deal is valued at $2 billion in total, $1.7 billion of which is to be paid by Seattle Genetics in the form of clinical development, manufacturing, and sales.
Immunomedics retains the right to consider other offers before closing, while Seattle Genetics has the first right of refusal to match the other offers. Should the clinical-stage biopharmaceutical company not choose Seattle Genetics, Immunomedics must pay the biotechnology company a termination fee.
If the deal is finalized, Bothell-based Seattle Genetics will have the exclusive global rights to develop, manufacture, and commercialize IMMU-132. While still in clinical trials, new data shows an improved overall survival rate for patients with triple-negative breast cancer. Typically, median overall survival in patients receiving first-line therapy for the disease is around 12 months; the latest data from Immunomedics shows this survival extended to almost 19 months due to the ADC (antibody-drug conjugate).
Lead investigator Linda Vahat, M.D., says that these results are excellent “in this very advanced and heavily pre-treated group of patients who have exhausted virtually all therapeutic options.”
Vahat added that she had “never seen these types of responses before” in the patient group used, and “if there was no alopecia, this would be a perfect therapy.”
Clay Siegall, founder and CEO of Seattle Genetics, said: “This agreement would add a promising late-stage ADC to our pipeline as we continue making progress towards our goal of becoming a global, multi-product oncology company.”
At the heart of the deal, however, lies the problem of funding. Seattle Genetics currently has $612 million in cash equivalents and will need to fundraise to make the milestone payments of up to $1.7 billion plus royalties, according to research analyst Micheal Sheikh. Furthermore, Seattle Genetics is losing money in core business with flat licensing revenues, and losses from operations have almost doubled, creating a clear funding gap.
