West Coast Editor

Hailed as the biggest biotech licensing deal ever, Genmab A/S' potential DKK12 billion (US$2.1 billion) pact with London-based GlaxoSmithKline plc gives the London-based pharma giant worldwide rights to the late-stage HuMax-CD20, and a stake of just more than 10 percent in Genmab.

GSK is paying DKK582 million up front as a license fee, and buying about DKK2 billion worth of Genmab stock - about 4.4 million shares - with more to follow in development fees and milestone payments, as well as tiered, double-digit royalties.

Lisa Drakeman, Genmab's CEO, said that "there will be pre-filing milestones and, while there are some post-commercialization milestones, they certainly are not the majority," but declined to provide more specifics during a conference call.

Genmab has pushed the fully human monoclonal antibody HuMax-CD20 as far as Phase III trials in two indications, CD20 positive B-cell chronic lymphocytic leukemia and follicular non-Hodgkin's lymphoma, and has it in Phase II trials for rheumatoid arthritis. Until 2008, the Copenhagen, Denmark-based firm will continue to handle development costs, after which the firms will share them equally.

GSK would take over for commercial manufacturing, a "tremendous commitment," as Drakeman noted. She said options were evaluated "through the entire range of deal terms," and Genmab accomplished its goal. "We believe we've retained half the value of the product altogether," she said. Investors apparently liked the deal.

Shares of Genmab on the Cophenhagen Stock Exchange jumped DKK38, or 11 percent, to an all-time high DKK380. A few weeks ago, rumblings of a potential takeover tickled Genmab's shares, pushing them to DKK287.50, a 5 percent rise. Medarex Inc., of Princeton, N.J., owns a larger share of Genmab - a slice that stood at just under 20 percent, as of the first quarter of this year.

The NHL Phase III trial with HuMax-CD20, begun in July, involves about 162 patients who are refractory to either the anti-CD20 antibody Rituxan (rituximab) in combination with chemotherapy or as maintenance treatment. In the U.S., South San Francisco-based Genentech Inc. and Cambridge, Mass.-based Biogen Idec Inc. market Rituxan - which also made news this week, and not especially good news.

Monday, the FDA and Genentech warned physicians about two deaths among patients getting Rituxan off label for lupus. The patients developed a rare brain infection called progressive multifocal leukoencephalopathy, caused by reactivated JC virus, present in about 80 percent of adults. Rituxan is FDA-cleared for the treatment of CD20-positive, B-cell NHL and for moderately to severely active RA when other therapies have failed.

"The risk of PML is already included on Rituxan's label, as 23 patients had previously been reported to have PML following treatment with Rituxan for hematologic cancer," Brian Holley, analyst with CIBC World Markets in New York, pointed out in a research report. "Given the high number of patients who have received Rituxan since its approval in 1997, we do not believe this risk is overly [worrisome]."

Still, it was enough to prompt a question during the conference call with Drakeman,

"We signed this transaction just before the press release went out this morning, so it definitely was signed after the [Rituxan] news but, no, there were no discussions on that," she said.

Deep-pocketed GSK earlier this month agreed to pay £230 million in cash for Domantis Ltd., a privately held UK firm developing preclinical domain antibodies, and separately entered a potential $1.2 billion deal with Lexington, Mass.-based EPIX Pharmaceuticals Inc. to develop drugs for Alzheimer's disease and others. In the Genmab deal, GSK also gets an option to the firm's CD20 UniBody, a stable, smaller antibody format that could make a nice fit with the work done by Domantis. (See BioWorld Today, Dec. 11, 2006, and Dec. 13, 2006.)

GSK could buy more of a stake in Genmab, which meanwhile is looking to partner its HuMax-EGFR (zalutumumab), the antibody that entered Phase I/II trial in October in combination with chemo-radiation as a first-line treatment for squamous cell carcinoma of the head and neck. Drakeman said "numerous parties [are] looking at that one."

Also part of the GSK arrangement is an option for Genmab to co-promote HuMax-CD20 in a targeted oncology setting in the U.S. and the Nordic region. If that happens, Genmab also would get the option co-promote GSK's radiolabeled monoclonal antibody Bexxar (tositumomab, iodine-131) for NHL and Arranon (nelarabine) for T-cell leukemia in the U.S., as well as Atriance (nelarabine) for that indication in relevant countries of the Nordic region.

The GSK-Genmab deal tops the $2 billion partnership struck in 2001 (and later retooled) between New York-based ImClone Systems Inc. with Bristol-Myers Squibb Co., also of New York, to help develop and promote the colorectal cancer monoclonal antibody Erbitux (cetuximab), which blocks EGFR. (See BioWorld Today, Sept. 20, 2001.)