By Ben Fox Rubin
OncoMed Pharmaceuticals Inc. (OMED) and Celgene Corp. (CELG)
agreed to jointly develop and commercialize up to six potential
anticancer stem cell treatments from OncoMed's pipeline, providing
OncoMed with an infusion of cash to study the treatments.
OncoMed, a small biopharmaceutical firm that went public in
July, will receive $177.25 million upfront, including a $22.25
million equity investment. Celgene, a much larger biopharmaceutical
company, will buy OncoMed shares through a private placement of
newly issued stock at a price of $15.13 each, an 8.1% premium over
Monday's closing price. Additional and milestone payments for
developing the drugs could reach hundreds of millions of
dollars.
The alliance will involve the development of demcizumab--one of
OncoMed's most advanced clinical candidates--as well as a
bispecific antibody and up to four additional biologics programs.
Payments for demcizumab development could total up to about $790
million, while payments for the bispecific antibody could total up
to $505 million. For the other four biologics, each program is
eligible for about $440 million of option exercise, development,
regulatory and commercial payments.
OncoMed will control and conduct initial clinical studies, at
which point Celgene has an option to license world-wide rights to
the potential treatments. OncoMed retains global co-development and
U.S. co-commercialization rights for five of the six anti-CSC
product candidates with 50/50 U.S. profit sharing, and royalties to
be received in other territories.
Celgene obtains an exclusive option on demcizumab during or
after the completion of certain future planned Phase 2 clinical
trials to be conducted by OncoMed. Demcizumab is currently in three
Phase 1b trials. Subsequent to option exercise, the parties will
co-develop demcizumab, sharing global development costs on a 1/3
OncoMed and 2/3 Celgene basis.
OncoMed shares, which had an initial public offering price of
$17 a share, closed Monday at $14 and were halted premarket.
Celgene shares closed at $163.11 and were inactive premarket.
Write to Ben Fox Rubin at ben.rubin@wsj.com
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