By Brady Huggett
Genzyme Molecular Oncology entered a discovery and licensing agreement with Purdue Pharma L.P. that could be worth $330 million, and then watched its stock rise 37 percent Wednesday.
"We think this is a fantastic deal," said Gail Maderis, president of Genzyme Molecular Oncology. "Financially, it is very attractive for us. It sets a benchmark for our antigen-discovery program."
The deal specifies Purdue Pharma, of Stamford, Conn., will select up to 20 cancer antigens identified by Genzyme, of Framingham, Mass., under the three-year research program. Both companies may commercialize products using those selected antigens. Any identified antigens not selected by Purdue will remain the property of Genzyme.
Purdue BioPharma, a subsidiary of Purdue Pharma, will use its proprietary technologies, including its Synthebody antibody-engineering platforms, epitope strings and anti-idiotype inducers, against these antigen targets to develop cancer agents and vaccines. Genzyme will use its own technologies, including gene therapy, cell therapy, peptide and protein-based technologies against the identified antigen targets for its cancer product development.
Genzyme will receive more than $21 million in committed funding, $12 million of which already has been delivered. If Purdue selects antigens, Genzyme may receive milestone payments related to research and development progress in excess of $310 million, and Genzyme also is entitled to receive royalties on any sales of Purdue therapeutic products containing antigens discovered under the agreement. The $330 million figure is based on selection and subsequent approval of 20 antigens.
"What is important," Maderis said, "is we wanted to extend our reach and provide access to our antigens, but in a way that didn't detract from us developing our own vaccines. We retain the rights to [antigens] that [Purdue] does not select, and we anticipate that 20 will be less than half the amount that we discover in the next three years."
Maderis added that the companies could agree to extend the collaboration.
Genzyme's antigen-discovery platform integrates four proprietary technologies: Selec-T, Scan, Sage and Sphere. Selec-T and Scan use immune cells derived from patient tumor samples to analyze antigen profiles of various tumor cell lines. Sage is its gene expression database that contains more than 3 million datapoints on a variety of tumor points. Genzyme employs Sphere, a high-throughput screening methodology, to identify potent, modified antigen fragments.
Genzyme signed a licensing agreement last week granting Invitrogen Corp. exclusive worldwide rights to sell Sage in standardized reagent kits. Genzyme has initiated Phase I/II clinical trials on melanoma and breast cancer vaccines and has two other cancer products in the preclinical stage.
"What we have put together in our antigen-discovery program is an incredibly powerful combination of genomics and high-throughput screening," Maderis said. "That is the key to having gained Purdue as a partner."
Purdue is a pharmaceutical company that had a 50 percent growth in sales in 1999, to more than $900 million. One year ago, Purdue Pharma did not exercise its option on a potential $100 million deal with AltaRex Corp. to develop and commercialize AltaRex's two lead antibody drugs. (See BioWorld Today, Oct. 18, 1999.)
"We believe Purdue shares our vision for cancer vaccines," Maderis said. "Not everyone may know about them because they are a very closely held private company, but they are aggressively investing in this field."
News of the agreement shot Genzyme Molecular Oncology's stock (NASDAQ:GZMO) up $3.75 Wednesday to close at $14.
"We feel it is a validation of our technology," Maderis said. "We told the marketplace that it would be a substantial agreement and we are delighted to see we are getting some recognition in the market."