Washington Editor

Amgen Inc. exercised its commercial option ahead of schedule for HuMax-IL15, Genmab A/S' Phase II candidate believed to have potential in a variety of inflammation diseases such as rheumatoid arthritis.

For Genmab, the decision means an immediate $10 million milestone payment plus the potential of up to $135.5 million in license fees and other milestones. In addition to the HuMax-IL15 antibody, the deal covers Genmab's interleukin-15 receptor program and a new antibody program for another disease target.

Barbara Bronson Gray, a spokeswoman for Amgen, of Thousand Oaks, Calif., told BioWorld Today the company would not disclose the target of the new disease program nor release any additional information about the plan for IL-15 development.

But in a conference call from Genmab's office in Copenhagen, Denmark, CEO Lisa Drakeman discussed certain specifics with analysts, reporters and shareholders. "Not only have they exercised the option early, they have also expanded the collaboration to include a new program. I think that we're very proud of that and this really is a moment that we can point to the good job Genmab's staff has done," she said.

HuMax-IL15 is a high-affinity, fully human antibody against interleukin-15. IL-15 is a cytokine, or an immune system signaling molecule that appears early in the cascade of events that ultimately lead to inflammatory diseases, Genmab said.

Amgen got its shot at the Genmab project via its $10.3 billion merger with Seattle-based Immunex Corp. completed last summer. (See BioWorld Today, July 18, 2002, and Dec. 18, 2002.)

HuMax-IL15's recent history began nearly three years ago when Genmab went looking for a collaborator. According to Drakeman, Genmab called on Immunex because Immunex had cloned IL-15 and built a broad patent estate around antibodies and methods of treatment associated with the product. At the time of the agreement, HuMax-IL15 was in Phase I/II studies. The deal gave Immunex 90 days after the conclusion of the Phase II study in rheumatoid arthritis to exercise its option on HuMax-IL15. The Phase II is expected to be finished by the end of the year. (See BioWorld Today, Oct. 9, 2001.)

And since Immunex, now Amgen, controls most patents around IL-15, Drakeman said she doesn't see much competition any time soon. "One of the great advantages of IL-15 over TNF antagonists is the intellectual property," Drakeman said. "TNF antagonists are spread over a number of companies and in this case, IL-15 is consolidated in the hands of Amgen."

Following the merger, Genmab marched on with IL-15, all the while planning to present its case to Amgen.

"Consequently, we were able to put a package in front of Amgen that was reasonably complete despite [the fact that] it was Phase I/II," Drakeman said. "It was enough to convince them that this program has considerable potential."

While the Phase II program continues, Amgen's team will begin preparing its own development plan for IL-15. Drakeman said the Phase II trial is not a pivotal study, but was designed to help Amgen see potential in the antibody.

"Genmab has been studying arthritis patients who have not had other biologics in this recent Phase II study. It is our understanding that Amgen is very interested in this as a product for diseases of inflammation," Drakeman said. "They are making their own development plan, so I think we'll have to see exactly where they intend to go with this."

Financial terms of the original deal with Immunex included a profit-sharing arrangement for Genmab. The new agreement, however, drops profit sharing in favor of royalties on product sales.

"This was a mutual decision," Drakeman said. "No matter how carefully the language is crafted in a [profit-sharing] agreement, we've all read the stories about people who own shares but never receive a profit. The royalty situation is very clear. We are entitled to a definitive amount of net sales and this allows us to have very clear expectations about what we are entitled to receive, and it allows Amgen to know what they owe us. It also gives Amgen a little more privacy because we were entitled to inspect, broadly, their books and records and their sales force, so I believe this give us an advantage and it gives them benefits as well."

Amgen's stock (NASDAQ:AMGN) fell 9 cents Tuesday to close at $65.85. Gemab's shares gained about 22 percent on the Copenhagen Stock Exchange.