Seattle Genetics Inc. said it was notified by Genentech Inc. that Genentech would no longer pursue development of Seattle Genetics' SGN-14, an anti-CD40 monoclonal antibody.

Genentech, of South San Francisco, licensed the monoclonal antibody from Bothell, Wash.-based Seattle Genetics in 1999. However, cancer-focused Seattle Genetics said it would continue development of the product candidate in hematological malignancies.

"For Seattle Genetics, we are very excited about this program, and we think there are real upside opportunities with patients with hematological malignancies," Clay Siegall, president and chief scientific officer of Seattle Genetics, told BioWorld Today. "We are especially interested in multiple myeloma and non-Hodgkin's lymphoma."

Siegall said he was not in a position to outline the development plans for SGN-14, as the company had just learned of Genentech's decision not to pursue development beyond preclinical studies the previous night.

"We worked through the evening to get this [news of a material event] out this morning, and I think we were trying to be incredibly responsive and aboveboard," Siegall said.

As for why Genentech dropped development plans, Siegall said, "That's something you really need to ask Genentech." He noted that it was a "corporate decision."

Genentech officials did not return calls seeking comment.

In addition to having the right to develop SGN-14 on its own, Seattle Genetics will be responsible for paying Genentech royalties on any sales using Genentech technology. Genentech also agreed to transfer technology created during the collaboration to Seattle Genetics.

The original agreement to license the candidate provided multiple potential milestone payments through development for Seattle Genetics.

Siegall stressed that Genentech's decision to return SGN-14 does not affect Seattle Genetics' ongoing collaboration with Genentech to provide technology for use with Seattle Genetics' antibodies targeted to certain diseases such as cancer. Specifically, in April Genentech licensed Seattle Genetics' antibody-drug conjugate technology. That technology uses synthetic drugs that are readily manufactured to combine with stable linkers, which, upon entering a tumor, are designed to cleave off the antibody. The linkers allow for the release of the drug intact. (See BioWorld Today, April 23, 2002.)

Seattle Genetics has three other candidates in clinical trials: SGN10, a monoclonal antibody-drug conjugate comprised of the chimeric antibody BR96 linked to eight doxorubicin drug molecules per antibody, is in multiple Phase II trials for breast, lung, prostate and ovarian cancers; SGN10, a single-chain immunotoxin comprised of the variable region of the BR96 antibody and PE40, a binding-defective form of the protein toxin Pseudomonas exotoxin A, is in multiple Phase I studies for solid tumors; and SGN30, which targets a receptor called CDN30, recently completed a single-dose Phase I study. SGN30 is scheduled to begin Phase I/II studies before year's end, Siegall said.

Seattle Genetics' stock (NASDAQ:SGEN) fell 18 cents Tuesday to close at $2.64. Genentech's stock (NYSE:DNA) rose $1.09 to close at $32.55.