Seattle Genetics Inc. found another interested suitor for its antibody-drug conjugate technology.

The Bothell, Wash.-based company agreed to provide a license to the technology, called ADC, to Bayer Pharmaceuticals Corp., which plans to use it to link cell-killing drugs to antibodies against an unspecified tumor target. ADCs use the targeting ability of monoclonal antibodies to deliver payloads to specific cells.

"This is our fifth partner for our technology," Seattle Genetics President and CEO Clay Siegall told BioWorld Today. "It's a technology that you can use to empower antibodies, making them more potent than antibodies on their own." He added that when there is a need for "more potency, our technology is stable, effective in all our experiments and relatively simple to use because it's synthetically prepared."

That promise drew in Bayer Pharmaceuticals, which gained an exclusive license to use the ADC technology for its internal target. In return, it paid a $2 million up-front fee to Seattle Genetics and also agreed to make progress-dependent milestone payments of an undisclosed value, eventually followed by royalties on net sales of resulting ADC products. Bayer Pharmaceuticals, a unit of Leverkusen, Germany-based Bayer AG, is responsible for research, product development, manufacturing and commercialization of all products in the multiyear collaboration.

Seattle Genetics will receive material supply and annual maintenance fees to retain the license, as well as research support payments for any assistance provided to Bayer in developing ADC products.

Other licensees of the company's technology include Genentech Inc., of South San Francisco; Celltech Group plc, of Slough, UK (bought by UCB SA); Protein Design Labs Inc., of Fremont, Calif.; and CuraGen Corp., of New Haven, Conn. The drug-linker system uses an auristatin derivative as its payload to stop mitosis. It is bridged to an antibody by way of a chemical link that Siegall said is stable in the bloodstream, but can be released inside a tumor cell, courtesy of enzymatic activity that does not occur in the bloodstream.

"It's straightforward to manufacture, and we started manufacturing it inside Seattle Genetics," Siegall said. "But for clinical-grade material, we have been manufacturing at a larger scale with an outsourcer."

The company uses Albany Molecular Research Inc., of Albany, N.Y., as a preferred provider for such large-scale manufacturing needs. In the latest deal, Bayer initially will acquire research-grade material from Seattle Genetics, though longer term it has the option to buy material directly from Albany Molecular. Such a third-party arrangement also would kick payments back to Seattle Genetics.

On its own, its preclinical portfolio includes a pair of ADC-based products - SGN-35 and SGN-75. The former, to be developed for hematological malignancies, is targeted for an investigational new drug application next year. The latter, to be developed for hematological malignancies, renal-cell carcinoma and autoimmune diseases, is targeted for an investigational new drug application in 2006.

Seattle Genetics' clinical pipeline includes a pair of products in Phase II - SGN-30 and SGN-15. SGN-30 is an antibody for T-cell lymphoma and Hodgkin's disease, and the company is targeting a biologics license application in 2006. SGN-15 is being tested for lung cancer and is in a second Phase II study that uses a more optimal schedule than the initial Phase II trial. A third clinical candidate, SGN-40, is in Phase I for multiple myeloma and non-Hodgkin's lymphoma.

"By 2006, we should have five unique products that we're developing internally," Siegall said. "Our technology that we partner brings in revenue, milestones and, ultimately, royalties in the future to supplement and help up us fund some of our internal work."

On Tuesday, Seattle Genetics' stock (NASDAQ:SGEN) gained 15 cents to close at $6.63.

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