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Seattle Genetics Inks $200M Licensing Deal with Pfizer

BioWorld Today Contributing Writer

For anyone hoping to get in on the ground floor of Seattle Genetics Inc.'s antibody-drug conjugate (ADC), it's already too late. The licensing deal by Pfizer Inc. for access to a single target, at $8 million up front and $200 million in milestones, was closed at a significant premium over a similar deal in December 2009 with GlaxoSmithKline plc. In that deal, GSK paid $12 million up front with $390 million in milestones for several targets.

The rising price in part reflects the stunning Phase II clinical success of the Bothell, Wash.-based company's lymphoma candidate, brentuximab vedotin.

"When you look back at Seattle Genetics ADC deals over the years, we used to charge a different rate," Seagen CEO Clay Siegall told BioWorld Today.

"The deals have progressed. Initially we were doing deals at $1 million to $2 million per target and $30 million to $50 million in milestones . . . the current deal is $8 million, with $200 million in milestones. We're excited with the progression of how our deals have been moving forward," he added.

Oppenheimer and Co. Inc. analyst Bret Holley pointing out the increasing licensing value of ADC technology in a recent note wrote, "Additional collaborations such as this highlight the value of SGEN's ADC technology and should continue to grow the company's revenue base."

Oppenheimer remains buyers of Seagen stock, calling the company a "core biotech holding."

Under the agreement, Pfizer will be responsible for development, manufacturing and commercialization of any products discovered under the collaboration.

In addition to the up-front payment, milestone payments and royalties, Pfizer will pay material supply and annual maintenance fees and make research support payments in return for assistance provided by Seattle Genetics.

Seagen's own internal pipeline may be pumping up the reputation of its ADC technology. At December's American Society of Hematology (ASH) meeting, the company reported strong Phase IIb clinical results for its candidate in anaplastic large cell lymphoma (ALCL), brentuximab vedotin.

The drug showed 97 percent tumor volume reduction, 86 percent objective response and 53 percent complete response in a Phase IIb trial in anaplastic large cell lymphoma.

Because of the strength of the IIb data, Seagen and its partner Millennium Pharmaceuticals Inc., a division of Takeda Pharmaceutical Co. Ltd., of Osaka, Japan, will press for approval rather than waiting to complete Phase III trials. (See BioWorld Today, Dec. 8, 2010.)

Seattle will be submitting its biologics license application in the first quarter.

Its global partner, Cambridge, Mass.-based Millennium, plans to submit a marketing authorization application to the European Medicines Agency in the first half of the year. Hodgkin's lymphoma and systemic ALCL patients will be able to access the drug early through special programs set up by the company.

Brentuximab vedotin is designed using ADC technology to link an anti-CD30 antibody to a drug molecule that causes cell death when internalized, monomethyl auristatin E.

In addition to brentuximab vedotin, Seagen's pipeline includes SGN-33 (linuzumab) in Phase IIb for acute myeloid leukemia, and SGN-75, in Phase I for CD70-positive relapsed and refractory non-Hodgkin's lymphoma.

According to Siegall, Seattle Genetics uses technology licensing deals as a stable form of funding to support the company's operating expenses, while focusing mainly on developing products for cancer. Seagen has ongoing collaborations with a number of companies including Genentech Inc., Millennium, GlaxoSmithKline, Agensys Inc., Bayer AG, Medimmune LLC and more.

Seagen's August 2010 deal with Genentech included a $12 million up-front payment with potential milestones and maintenance fees of $900 million, plus royalties. In exchange, Genentech gained access to a number of targets. (See BioWorld Today, Aug. 4, 2010.)

And in December 2009, Seagen closed its $402 million deal with GlaxoSmithKline and a deal with Astellas Pharma Inc., an affiliate of Agensys Inc., for $12 million up front with $350 million in milestones. Both contracts covered multiple targets. (See BioWorld Today, Nov. 24, 2009.)

The company said that it now has a total of 10 ongoing ADC collaborations, and that six of its collaborators are in clinical development with ADC-based products. It has received more than $145 million to date in ADC licensing payments, with many future milestones and royalties yet to be earned.

As ADCs become increasingly hot items, Seattle Genetics is one of several major players in the field. One is Pfizer itself. With its acquisition of Wyeth Pharmaceuticals Inc., Pfizer acquired Wyeth's ADC technology. Another is Immunogen Inc.

Mylotarg, developed by Wyeth and now owned by Pfizer, is the only antibody-drug conjugate approved by the FDA.

It is comprised of recombinant humanized IgG4 kappa antibody plus calicheamicin, a cytotoxic antitumor antibiotic. Pfizer also has a Phase II ADC candidate for non-Hodgkin's lymphoma, inotuzumab ozogamicin.

ImmunoGen's antibody drug conjugate technology is the targeted antibody payload (TAP). In October, the company reported positive clinical results for its TAP drug lorvotuzumab mertansine (IMGN901) for Merkel cell carcinoma, small-cell lung cancer, ovarian cancer, multiple myeloma and other tumors that express the CD56 antigen. (See BioWorld Today, Oct. 12, 2010.)

Immunogen also has deals with some big players in the industry. It closed a deal with Novartis in October for $45 million up front and $200.5 million in potential milestones, plus royalties. And Amgen separately licensed rights to apply TAP technology to two separate targets in September 2009 and November 2009.

Each license was for $1 million up front and $34 million in milestones, plus royalties.

In other dealmaking news:

• Immutep SA, of Orsay, France, announced a license agreement granting GlaxoSmithKline (GSK) exclusive worldwide rights to ImmuTuneIMP731 and any other antibodies that deplete LAG-3 positive cells. IMP731 has demonstrated potency at low doses in preclinical models of T-cell mediated inflammation and could represent a new therapeutic approach to the treatment of autoimmune disease, the company said. Under terms of the agreement, GSK will assume all development responsibility and associated costs for IMP731. Immutep will receive an up-front payment and milestones of up to $100 million and is eligible for single-digit, tiered royalties if all objectives are achieved.

• Ligand Pharmaceuticals Inc., of San Diego, has entered into a strategic relationship with Chiva Pharmaceuticals Inc., of Los Altos Hills, Calif., an affiliate of Hainan Kaihua Pharmaceutical Co. Ltd., to develop multiple Ligand assets and technology in China and potentially worldwide. Chiva is being granted licenses to begin immediate development in China of Ligand's two clinical-stage HepDirect programs, Pradefovir for hepatitis B and MB01733 for hepatocellular carcinoma. Additionally, Ligand is granting Chiva a nonexclusive HepDirect technology license for the discovery, development and worldwide commercialization of new compounds in hepatitis B, hepatitis C and hepatocellular carcinoma. Under terms of the agreement, Ligand has the potential to earn more than $100 million in milestones and royalties on potential sales. In addition, Ligand has the potential to receive a 10 percent equity position in Chiva and will also receive an undisclosed percentage of any revenue generated from sublicensing of collaboration compounds to third parties in a major world market. Ligand is entitled to receive initial 2011 license payments that total $1 million.

• Spirogen Ltd., of London, announced a multi-year research collaboration and license agreement with Genentech Inc., of South San Francisco, a member of the Roche Group. The companies will collaborate on the discovery and development of antibody drug conjugates (ADCs) as potential anticancer agents, using Spirogen's PBD drugs and associated linker technology. Under the terms of the agreement, Spirogen will be primarily responsible for synthesizing and manufacturing drug reagents, while Genentech will use Spirogen's drug reagents to generate ADCs and evaluate their potential therapeutic utility. Genentech will have the exclusive license to fully develop and commercialize licensed products that contain these ADCs. Terms of the multi-year collaboration include an initial one-off license fee, development milestones on reaching pre-defined targets and further milestones and royalties for licensed products.

Published: January 7, 2011