Bayer to spend up to $520 million on antibody drug conjugate deal with Seattle Genetics

US biotech firm Seattle Genetics (Nasdaq: SGEN) says it has entered into a new antibody-drug conjugate (ADC) collaboration with German drug major Bayer (BAYN: DE). The news saw Seattle’s shares down 4.6% to $28.57 by late afternoon, while Bayer rose 0.9% to 78.77 euros by close of trading yesterday (June 25).

Under the latest relationship, Bayer will pay upfront and option exercise fees of up to $20 million for worldwide rights to utilize Seattle Genetics’ auristatin-based ADC technology with antibodies to several oncology targets. Seattle Genetics is also eligible to receive up to around $500 million in potential milestone payments, as well as royalties on worldwide net sales of any resulting products under the multi-target collaboration. Bayer is responsible for research, product development, manufacturing and commercialization of all products under the collaboration.

“The significant clinical and preclinical progress across our ADC collaborations, and enthusiasm for our technology as demonstrated by this latest relationship with Bayer, continue to reinforce Seattle Genetics’ leadership position in the field,” said Natasha Hernday, vice president, corporate development, at Seattle Genetics.