Seattle Genetics and Genmab sign new antibody-drug conjugate deal

Biotech companies Seattle Genetics (Nasdaq: SGEN) of the USA and Denmark’s Genmab (OMX: GEN) have entered into an additional antibody-drug conjugate (ADC) collaboration. The news pushed Seattle’s shares up 2.3% to $41.04, in mid-morning US trading, while Genmab dipped 0.7% to 224.60 Danish kroner mid-afternoon n the Copenhagen exchange.

Under the new agreement, Genmab will pay an upfront fee of $11 million for exclusive rights to utilize Seattle Genetics’ auristatin-based ADC technology with Genmab’s HuMax-AXL, an antibody targeting AXL which is expressed on multiple types of solid cancers. Seattle Genetics is also entitled to receive more than $200 million in potential milestone payments and mid-to-high single digit royalties on worldwide net sales of any resulting products.

In addition, prior to Genmab’s initiation of a Phase III study for any resulting products, Seattle Genetics has the right to exercise an option to increase the royalties to double digits in exchange for a reduction of the milestone payments owed by Genmab. Irrespective of any exercise of option, Genmab remains in full control of development and commercialization. Today's news will not impact Genmab's 2014 financial guidance, the Danish firm said.