Washington Editor

Genentech Inc. will strengthen its long-standing relationship with Seattle Genetics Inc. by paying up to $50 million for access to technology to build its cancer program.

Genentech, of South San Francisco, licensed Seattle Genetics’ antibody-drug conjugate (ADC) technology for use with its antibodies targeted to certain diseases such as cancer. ADCs are comprised of monoclonal antibodies linked to potent cell-killing drugs.

“This technology is exciting because we are using high-potency drugs that are synthetic, so they are readily manufactured, and we are using stable linkers, meaning they are stable in the bloodstream. But when it gets into the tumor, the linker gets cleaved off the antibody and the linker itself basically allows for release of the drug in an intact, fully active form,” Clay Siegall, president and CEO of Bothell, Wash.-based Seattle Genetics, told BioWorld Today. “Our technology is the drug linker which is stable, highly potent and synthetic.”

Siegall said the drug linker systems could be used for a variety of diseases, “but I think cancer is the most obvious. However, I wouldn’t want to rule out immunologic diseases or infectious diseases and other types of disorders. In fact, we are very excited internally with looking at it for cancer and immunologic disease.”

Sabrina Johnson, Genentech’s director of corporate affairs, told BioWorld Today that the strategic importance of the technology is relevant to Genentech’s overall efforts in cancer. “It provides us access to new technologies that may enhance our efforts in the development of next-generation antibody-based therapeutics,” she said.

Seattle Genetics and Genentech already enjoy a relationship via development of PRO64553, an anti-CD40 monoclonal antibody for hematologic malignancies, licensed to Genentech in June 1999. The agreement includes multiple milestone payments through development to Seattle Genetics, as well as royalties on product sales.

Genentech is expected to file an investigational new drug application for PRO64553 this year.

Meanwhile, Genentech intends to use the ADC technology in its efforts to develop therapeutic antibodies linked to toxic payloads that could increase their potency.

Financially, the multiyear deal requires Genentech to pay an up-front fee and make an equity investment in Seattle Genetics. Additionally, Genentech may pay technology access fees and research fees, as well as progress-dependent milestone payments that could potentially total in excess of $50 million. If a specific benchmark is achieved under the collaboration, Seattle Genetics would have an option to sell additional equity to Genentech. Genentech also would pay royalties on net sales of any resulting products and is responsible for research, product development, manufacturing and commercialization of any products resulting from the collaboration.

When Seattle Genetics completed its initial public offering in March 2001, Genentech purchased $2 million in shares, or 285,714 of the 7 million shares sold. Seattle Genetics raised $49 million in its IPO. (See BioWorld Today, March 8, 2001.)

Siegall wouldn’t comment on the total amount Genentech has invested in or paid Seattle Genetics.

“We are delighted to work with Genentech. They are the recognized leader in monoclonal antibody therapeutics and we are delighted that they have agreed to work with our technology,” Siegall said. “We believe they are incredibly knowledgeable in this area and it is a great validation for us that a leader like Genentech has agreed to work with our technology.”

Seattle Genetics, founded in 1997 as an outgrowth of Bristol-Myers Squibb Co., focuses on internal drug development and licensing technology. (See BioWorld Today, May 7, 1998.)

The company has three products in the clinic: SGN15 is in multiple Phase II trials for solid tumors, SGN10 is in multiple Phase I studies for solid tumors and SGN30 has recently entered the clinic for hematologic malignancies.

About a month ago, Seattle Genetics entered a multiyear deal potentially worth about $30 million with Celltech Group plc, of Slough, UK, to use the ADC technology for immunological targets. (See BioWorld Today, March 29, 2002.)

Seattle Genetics’ stock (NASDAQ:SGEN) closed Monday at $5.72, up 42 cents, while Genentech’s (NYSE:DNA) closed at $38, down $1.11.

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