Pfizer pays over $200 million for rights to Seattle Genetics ADC technology

Seattle Genetics (Nasdaq: SGEN) saw its shares rise 3% to $16 in early trading yesterday, when it revealed that it has entered into a collaboration agreement with Pfizer (NYSE: PFE), under which the global drugs behemoth will pay an upfront fee of $8 million for rights to utilize its antibody-drug conjugate (ADC) technology with antibodies to a single oncology target, as well as over $200 million in potential milestones.

“This collaboration reflects the increasing value of our ADC technology and strong interest in its potential among leaders in the drug development community,” said Eric Dobmeier, chief business officer of Seattle Genetics. “We now have 10 ongoing ADC collaborations, six collaborator ADCs using our technology are in clinical development, and several additional programs are advancing towards the clinic. We have generated more than $145 million from ADC licensing, and we have the potential to receive significant future milestones and royalties for ADCs developed by our collaborators,” he explained.

Under the terms of the deal, Pfizer is responsible for research, product development, manufacturing and commercialization of any ADC products under the collaboration. Seattle Genetics is eligible to receive from Pfizer over $200 million in progress-dependent milestones as well as royalties on worldwide net sales of any resulting ADC products. Seattle Genetics also will receive material supply and annual maintenance fees as well as research support payments for assistance provided to Pfizer under the collaboration.