Pfizer Inc. (PFE) entered into an agreement with a France-based biopharmaceutical company, Cellectis to develop chimeric antigen receptor T-cell (CAR-T) immunotherapies directed at select targets. With this deal, Pfizer intends to develop immuno-oncology therapies.
Terms of the Agreement
As per the terms of the agreement, Pfizer received exclusive development and commercialization rights to CAR-T therapies directed at fifteen oncology related targets selected by Pfizer. For the Pfizer-selected targets, Pfizer and Cellectis will work together on preclinical research and thereafter Pfizer will be responsible for the development and potential commercialization of the CAR-T therapies.
Both companies will also work together on preclinical research on four Cellectis-selected targets. Pfizer enjoys the right of first refusal to the four Cellectis-selected targets. Cellectis may develop eight additional targets independently. In the case of Cellectis-selected targets, Cellectis will be solely responsible for development and commercialization activities.
Where financial terms are concerned, Pfizer will make an upfront payment of $80 million and will be responsible for research and development costs related to the Pfizer-selected targets and the four Cellectis-selected targets. Pfizer will also be obligated to make development, regulatory and commercial milestone payments of up to $185 million per Pfizer product. Additionally, Cellectis will be eligible to receive tiered royalties on net sales of products commercialized by Pfizer.
The deal also includes an equity agreement, under which Pfizer will purchase approximately 10% of Cellectis’ capital through newly issued shares at €9.25 per share. Cellectis plans to open a site in the U.S. to work closely with Pfizer.
We believe Cellectis’ proprietary technology will help Pfizer in developing immuno-oncology therapies. We note that Pfizer has been eyeing this market for quite some time now. A while back, the company was looking to acquire AstraZeneca (AZN) to boosts its immuno-oncology pipeline among other reasons.
Pfizer carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the health care sector include Gilead Sciences (GILD) and Allergan (AGN). Both Gilead and Allergan are Zacks Rank #1 (Strong Buy) stocks.
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