LONDON – Astrazeneca plc is taking a giant stride into antibody-drug conjugates (ADCs), acquiring payload technology company Spirogen plc for $200 million in cash, with a further $240 million to come in potential development milestones.

At the same time, Astrazeneca’s Medimmune antibody unit is making a $20 million investment in Spirogen’s current owner, ADC Therapeutics Sarl, as part of a collaboration agreement in which ADC Therapeutics and Medimmune jointly will develop two ADCs that use Spirogen’s pyrollobenzodiazepine (PBD) cytoxic agents.

ADC Therapeutics’ majority owner, Auven Therapeutics Management LLLP, a private equity company, is making a matching $20 million investment in ADC Therapeutics to fund the co-development work.

To date, Spirogen’s strategy was to license its PBD technology widely. Although not all partners have been disclosed, they number more than 10 and include Roche AG unit Genentech Inc., Polytherics Ltd. and Ablynx NV. Stephen Evans-Freke, chairman of Spirogen and managing partner of Auven, said the strategy changed when there was an approach to buy Spirogen.

“It was a competitive process: I’m pleased with the economic outcome, but also pleased Astrazeneca is the winner here, because it has a tremendous amount of capability and expertise in the area,” Evans-Freke told BioWorld Today.

The co-investment and collaboration deal for two ADCs also is significant. “There is synergy and other advantages to a close working relationship with Astrazeneca; it’s not just about the money,” Evans-Freke said.

Michael Forer, CEO of ADC Therapeutics and also a managing director of Auven, said the $40 million equity investment in ADC Therapeutics, combined with the collaboration agreement with Medimmune, means the company is now well funded. “Outside of our arrangement with Medimmune, we aim for ADC Therapeutics to have multiple proprietary products in clinical development within two years and to achieve clinical proof of concept by 2017,” Forer said.

ADCs have the potential to directly target many types of tumors while safeguarding healthy cells, said Bahija Jallal, executive vice president at Medimmune. “The cutting-edge technologies developed by Spirogen and ADC Therapeutics complement Medimmune’s innovative antibody engineering capabilities, enabling us to accelerate antibody-drug conjugates into the clinic,” she said.

“There are two angles here,” Spirogen’s Evans-Freke explained. “Astrazeneca is gaining the use of a technology that can be applied across its entire [cancer antibody] technology portfolio. It is also denying access to competitors, other than those companies holding existing, narrowly defined licenses.”

The rights of those existing Spirogen licensees “are totally unaffected” by Astrazeneca’s acquisition, Evans-Freke said. “I would envisage ongoing scientific collaboration. We are dealing with extremely potent warhead technology and no one group will have the absolute answer in terms of how to develop it.”

All those rights now will be vested in a separate holding company, which will be 75 percent owned by Auven with the remainder owned by other Spirogen shareholders. Another asset going into the holding company is SG2000, a small-molecule PBD, which is in Phase II development. Evans-Freke said development of that product will continue.

Spirogen was spun out of University College London in 2001 to develop PBDs, which are DNA minor groove binding agents that can bind to and cross-link specific sites of the DNA of cancer cells. That prevents cancer cell division without distorting the DNA helix, a feature that prevents detection by the cell’s nucleotide excision repair system. It is thought that potentially could avoid the development of tumor drug resistance.

Auven’s interest in Spirogen dates to October 2009 when, under its previous name of Celtic Therapeutics Holding LLLP, it put in $15 million to fund the Phase II development of SG2000. (The name changed from Celtic Therapeutics to Auven in March 2013.)

ADC Therapeutics came into the picture in March 2012, when Celtic Therapeutics set up the company as a vehicle for funding the development of a drug pipeline based on Spirogen’s technology, committing up to $50 million for it to take forward 10 ADC programs in oncology. Other backers included the founding investors in Spirogen and Cancer Research Technology Ltd., the technology commercialization arm of the charity Cancer Research UK.

Since then Lausanne, Switzerland-based ADC Therapeutics has in-licensed 10 tumor-targeting antibodies and done preclinical work to link those to PBDs. It claims to have made major technical advances in optimizing the stability and therapeutic window of PBD-warheaded ADCs.