Seattle Genetics, Inc. (NASDAQ:SGEN) is best known for its one successful marketed cancer drug, but it has been busy working behind the scenes for years on new technologies for making souped-up antibodies against cancer. Now AbbVie Inc (NYSE:ABBV) has agreed to pay $25 million to gain more access to some of the new technology that links targeted antibodies to potent toxins.
Seattle Genetics, Inc. (NASDAQ:SGEN) said today it has gotten an upfront $25 million payment from North Chicago, IL-based AbbVie Inc (NYSE:ABBV), the company that markets the blockbuster arthritis drug adalimumab (Humira). The deal allows AbbVie to use the Seattle Genetics, Inc. (NASDAQ:SGEN)’s PBD dimer technology for linking a new kind of toxin to targeted antibodies, with an ability to place the toxins at precise locations on the large Y-shaped antibodies. Scientists believe the “site-specific” binding technique may provide an advantage with manufacturing consistency and a more consistent effect against tumors.
The deal is structured to allow AbbVie Inc (NYSE:ABBV) to work on souped-up antibodies against an undisclosed number of biological targets for cancer drugs. Seattle Genetics will be eligible for as much as $255 million in license fees and milestone payments per target, if the AbbVie Inc (NYSE:ABBV) drugs reach certain development and commercial goals. If any of the drug candidates reach the market, Seattle Genetics, Inc. (NASDAQ:SGEN) would collect a “mid-to-high” single digit percentage royalty on each product.
AbbVie Inc (NYSE:ABBV) has shown increasing interest in antibody-drug conjugate technology over the years, starting when it agreed to pay $8 million upfront to Seattle Genetics in 2011. AbbVie Inc (NYSE:ABBV) agreed to expand the deal with a $25 million payment a year later, and has now expanded it again.
Seattle Genetics, Inc. (NASDAQ:SGEN) has made its name in the biotech business the past couple years with brentuximab vedotin (Adcetris). It’s the first commercially successful example of a drug that combines the precise targeting capability of an antibody with a toxin that provides an extra wallop to tumors. The success was followed by the FDA approval last year of Genentech’s trastuzumab emtansine (Kadcyla), which is essentially a supercharged version of its original “naked” antibody marketed as Herceptin. A wide range of competitors, at large companies and small ones, have since sought to one-up that achievement. Some are experimenting with different kinds of toxins, different linkers, or with antibody-binding technologies that provide “site-specific” conjugation, so the same number of toxins get attached to the antibody every time, and they get attached to the same spot.
Seattle Genetics, Inc. (NASDAQ:SGEN) stock climbed 2.7 percent today, to reach $41.07 a share at 10:44 am ET. That means the company now has a market valuation of just over $5 billion.
The article Seattle Genetics Nabs $25M More From AbbVie for Souped Up Antibodies originally appeared on Fool.com and is written by Luke Timmerman.
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