LONDON – Genmab A/S signed up a "dream partner" for its anti-CD38 monoclonal antibody daratumumab, agreeing a worldwide commercialization deal with Janssen Biotech Inc., with a total potential value of more than $1.1 billion, of which $135 million is to be paid up front.

In addition, Janssen will pay all costs for developing the product, which currently is in two Phase I/II trials in multiple myeloma, and has agreed to a development plan involving 10 or more studies using the antibody both as a monotherapy and in combination with other drugs.

The plan includes Phase III trials with the aim of getting daratumumab to market as soon as possible as a monotherapy, and studies to expand the possible indications to other hematological cancers.

In total, 3,500 patients will be enrolled in the studies that have been planned to date.

"I'm very pleased at having completed the deal." Janssen is a "perfect partner" with a broad development plan for daratumumab, and "this secures our financial position," said CEO Jan van Winkel, running out of superlatives as he outlined the terms of the agreement with the Johnson & Johnson company.

Genmab will receive an up-front license fee of $55 million and Johnson & Johnson Development Corp. will invest $80 million in 5.4 million new Genmab shares at a price of DKK88 per share (US$14.80). That is a 30 percent premium to Genmab's closing share price on Aug. 29 of DKK67.85. After completion, Johnson & Johnson will own 10.73 percent of Genmab's equity.

The share price rose 18.79 percent on news of the deal to DKK80.60 by midday Thursday and then closed at DKK78.75.

In addition to the $1 billion in milestones spread across development, regulatory and sales, Copenhagen, Denmark-based Genmab will be entitled to tiered double-digit royalties. While he could not give details of when milestones are due, van Winkel said they are "not completely back-ended," but spread out across development and commercialization. "We won't be waiting until products are on the market," he said.

Janssen also will be picking up the costs of the two ongoing Phase I/II studies.

The deal will have a significant impact on Genmab's financial position, bestowing the company with sufficient cash for four years at the current burn rate. "This is big money; it is a game changer for the company," van Winkel said. With daratumumab and a backup antibody now partnered with Janssen, the cash provides the opportunity to invest in antibody drug conjugates and bispecific products further back in the pipeline. "This is a no-risk deal for Genmab; there are no costs going forward, only milestones and royalties," van Winkel noted.

"We will get to invest resources to advance new technologies, expand the pipeline and build a successful and financially sustainable company," he added. Genmab will take products further under its own steam. "We need to hang onto products longer than we can do at present," van Winkel said, adding that this is way "to get robust growth."

According to van Winkel, daratumumab has shown "outstanding activity" in preclinical studies and in the early stages of clinical development, with one patient showing a partial response, another with stable disease and a third patient treated not having been assessed as yet.

A 'Brilliant' Deal

There was significant interest from other pharma companies in daratumumab. "As of yesterday, we were getting term sheets from other parties, so it was very competitive," van Winkel said.

Along with wowing analysts on the conference call about what one described as a "brilliant" deal, van Winkel also promised to remove the albatross of its manufacturing facility in Minnesota, which has been surplus to requirements since Genmab acquired it four years ago. Janssen was asked if it was interested "and quickly said no," van Winkel said. However, there are very active negotiations, and the facility will be sold before the end of the year, he pledged.

"You've seen we have been very good at executing excellent deals, so let's hope we can tick that one off the list." The value of the facility is estimated to be $58 million, and the sale will extend Genmab's cash runway for a further year.

The other deals to which van Winkel referred are two agreements based on Genmab's DuoBody bispecific antibody platform. In the most recent of those in July, the company signed up to develop antibodies with Janssen, banking $3.5 million up front, with $175 million more in milestone and license payments for each of a possible 10 programs.

Before that, in June, Genmab agreed to a DuoBody collaboration with Basel, Switzerland-based Novartis AG, to develop two products with a total of $175 million in milestones on offer. (See BioWorld Today, July 18, 2012.)

The deal for daratumumab signals the complete turnaround of Genmab's fortunes following the resignation two years ago of the founding CEO Lisa Drakeman, after the firm's two main programs of that period both failed in Phase III. The acquisition of the Minnesota facility for $480 million in 2008 was also seen as a serious error. (See BioWorld International, June 16, 2010.)