Seattle Genetics-Unum Therapeutics Tie Up for Cancer Drugs - Analyst Blog
Seattle Genetics, Inc. SGEN and Unum Therapeutics announced the signing of a strategic collaboration and license agreement for the development and commercialization of novel antibody-coupled T-cell receptor (ACTR) therapies for the treatment of cancer.
Terms of the Deal
Per the deal, Seattle Genetics will make an upfront payment of $25 million to Unum Therapeutics, apart from an equity investment of $5 million in the latter’s next round of private financing.
To begin with, both companies will develop two ACTR therapies using Seattle Genetics’ antibodies. Seattle Genetics has the option to expand the collaboration to include a third ACTR product. While Unum is responsible for preclinical research and development activities through phase I, Seattle Genetics will funds these activities.
Beyond phase I development, the companies will jointly develop the candidates, fund development programs and commercialize the products (if approved), unless either of them opts out of the agreement. They will share profits on a 50-50 basis on any co-developed program within the U.S. In ex-U.S. markets, Seattle Genetics will retain exclusive commercial rights and pay high-single to mid-double digit royalties on sales to Unum Therapeutics. Total potential option fee and milestone payments may sum up to $615 million across all three ACTR programs.
Seattle Genetics said that it will revise its financial guidance for 2015, keeping in consideration the effects of the collaboration. The revised guidance will be provided along with second-quarter 2015 results, scheduled for Jul 30, 2015.
We note that currently Seattle Genetics is entirely dependent on its sole marketed product, Adcetris, for revenues. While Adcetris remains the growth engine for Seattle Genetics, we are encouraged with the company’s efforts to develop its pipeline.
Meanwhile, the company’s supplemental biologic license application for Adcetris for post-transplant consolidation treatment of Hodgkin lymphoma patients, who are at a high risk of relapse or progression is under FDA review. With priority review status, an action from the agency is expected by Aug 18, 2015.
Seattle Genetics carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the health care sector are Gilead Sciences Inc. GILD, Valeant Pharmaceuticals International, Inc. VRX and Actelion Ltd. ALIOF. All these stocks carry a Zacks Rank #1 (Strong Buy).
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