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By Catherine Hollingsworth
Staff Writer
Celldex Therapeutics Inc. took another step toward expanding its pipeline, agreeing to buy CuraGen Corp. in a $94.5 million stock deal that will bring in 11 drug candidates and some added cash.
Anthony Marucci, president and CEO of Celldex, told BioWorld Today that the deal fulfills a major initiative of the company to identify and bring in synergistic products. He noted that CuraGen's portfolio of 11 antibodies is fully owned by CuraGen, and no milestone or royalty payments are associated with them.
"We're really building a true immunology company," Marucci said.
CuraGen's lead product, CRO11, is in two Phase I/II studies in advanced melanoma and advanced breast cancer. Branford, Conn.-based CuraGen plans to present data from those studies at the annual American Society of Clinical Oncology (ASCO) meeting in Orlando, Fla, which started Friday.
Celldex also will present data at ASCO from its ongoing Phase II study of CDX-110 in glioblastoma (brain cancer) patients and safety and immune data from a Phase I study of CDX-1307.
In addition to rounding out Celldex's pipeline, the acquisition also is expected to extend Celldex's cash. CuraGen will have a cash balance of at least $54.5 million of net cash at closing.
As a result, Celldex expects its pro forma cash to increase to $96 million at close, with cash resources to advance its clinical programs through 2012.
"At first glance, we are encouraged by the deal as it boosts cash levels as well as brings a large amount of product candidates to be leveraged over the long term," analyst Joseph Pantginis, of Merriman Curhan Ford, stated in a research note,
The boards of both companies approved the tax-free transaction, which is expected to close in the third quarter. Stockholders still need to OK the deal.
The final purchase price could change as it is based on certain adjustments, including a collar between 32.5 percent and 58 percent of Celldex's outstanding common stock. The final agreed-upon price of the deal could affect the number of shares after the deal closes, Pantginis wrote
He rated Celldex "buy," with the potential for shares to trade toward a range of $12 to $13. He also indicated in a separate note issued ahead of ASCO that updated survival data from Celldex's Phase II glioblastoma trial, known as ACTII, "should give a boost to CDX110's potential."
This year, Celldex plans to finish ongoing Phase II trials of its lead product, CDX110, in breast cancer and melanoma, while also advancing other clinical programs, using money from the $96 million expected at closing, Marucci said.
CDX1307 for cancer is expected to finish Phase I this year and move into Phase II testing by the fourth quarter. And CDX1401 for solid tumors will be heading into Phase I/II studies.
Marucci said his company also plans to move another investigational drug into the clinic next year and has the infrastructure to work on more than one project at a time.
Timothy Shannon, president and CEO of CuraGen, said in a statement that the deal "offers CuraGen investors reduced risk via ownership of a broader portfolio, while still retaining upside potential of CR011 in the combined company."
In April, Needham, Mass.-based Celldex acquired rights to two immune-stimulating molecules from Thousand Oaks, Calif.-based Amgen Inc. Financial terms of that deal were not disclosed. The two ligands, Flt3 and CD40, fit with Celldex's Precision Targeted Immunotherapy Platform (APC targeting technology), and they potentially could be developed in combination with other proprietary molecules in the company's portfolio. (See BioWorld Today, April 10, 2009).
Shares in Celldex (NASDAQ;CLDX) rose 89 cents, or 11 percent, to close Friday at $9.02. Shares in CuraGen (NASDAQ;CRGN) gained 9 cents to close at $1.34. | 
