Staff Writer

Shares of Immunomedics Inc. continued to rise on Tuesday in the wake of a midstage antibody deal with Nycomed GmbH that beat analyst expectations.

After closing at $2.20 on Friday, the Morris Plains, N.J.-based company's stock (NASDAQ:IMMU) rose to $2.57 on Monday, and closed at $2.65 Tuesday, a gain of 8 cents.

The deal gave Zurich, Switzerland-based Nycomed worldwide rights in all indications except cancer to the subcutaneous formulation of Immunomedics' humanized anti-CD20 antibody, veltuzumab.

In exchange, Immunomedics will get $40 million up front and up to $580 million in milestone payments tied to clinical, regulatory and commercial achievements, as well as escalating double-digit royalties.

Terence Flynn, analyst with Lazard Capital Markets LLC, wrote in a research note that he had predicted the veltuzumab deal would bring in about $350 million, so the $620 million total potential value exceeded his expectations. The deal also tops the $338 million partnership Immunomedics signed with Brussels, Belgium-based UCB SA two years ago for autoimmune rights to the midstage, humanized anti-CD22 antibody, epratuzumab. (See BioWorld Today, May 11, 2006.)

Chau Cheng, associate director of investor relations and business analysis at Immunomedics, said the company selected Nycomed as a partner because the pharma is well positioned to "develop the full potential of veltuzumab" in noncancer indications, having sold off its cancer franchise earlier this year to focus on inflammation and autoimmune diseases, among other conditions.

Nycomed initially will develop veltuzumab for rheumatoid arthritis. The anti-CD20 antibody Rituxan (rituximab, Genentech Inc. and Biogen Idec Inc.) already is approved in that indication, but Cheng noted that veltuzumab's subcutaneous formulation would be more convenient and could offer fewer side effects due to its lower dose compared to intravenous Rituxan.

The convenience factor is particularly important in the autoimmune disease market, Cheng said, adding that autoimmune patients have a different mindset than cancer patients and do not want a needle in their arm for an hour-long infusion.

Immunomedics already is exploring veltuzumab's activity in treating the autoimmune disease idiopathic thrombocytopenic purpura (ITP). Data from a Phase I/II trial are expected by the end of the year. Nycomed will reimburse Immunomedics for development costs in ITP, but Immunomedics retained an option to co-promote veltuzumab for ITP in the U.S.

Retaining the co-promote option in ITP makes sense because the disease often is treated by the same doctors who treat blood cancers such as non-Hodgkin's lymphoma (NHL) - the main focus of Immunomedics' cancer program with veltuzumab.

Immunomedics completed a Phase I/II trial with intravenous veltuzumab for NHL in which all doses resulted in complete responses, partial responses and B-cell depletion. The significant activity even at low doses prompted the company to pursue the subcutaneous formulation, which is now in Phase I/II for NHL.

The company also is studying its anti-CD22 antibody epratuzumab for NHL and recently completed a Phase II trial in which epratuzumab labeled with the radioisotope yttrium-90 (Y-90) resulted in a 64 percent objective response rate and a 49 percent complete response rate in NHL patients. Additional, investigator-sponsored trials of epratuzumab are ongoing in diffuse large B-cell lymphoma, acute lymphocytic leukemia and follicular lymphoma.

Immunomedics retains the rights to both epratuzumab and veltuzumab in cancer, but Cheng said the company is "in the process of licensing out" both programs.

Earlier in its pipeline, Immunomedics is advancing a number of other internally developed and humanized antibodies. A Phase Ib trial is under way to study a Y-90-radiolabeled hPAM4 antibody in combination with gemcitabine for pancreatic cancer; an ongoing Phase I/II trial is evaluating the anti-CD74 antibody milatuzumab for multiple myeloma; a Phase I trial is looking at milatuzumab for NHL and chronic lymphocytic leukemia; and an investigator-sponsored Phase II trial program in Europe is under way for the I-131-labeled antibody labetuzumab for resected liver metastases of colorectal cancer.

Cheng added that with "veltuzumab out of the way, we will be able to bring new and exciting molecules into the pipeline."