Seattle Genetics returns rights to cancer drug candidate

US biotech Seattle Genetics (Nasdaq: SGEN) has agreed to terminate its license agreement with Immunomedics (Nasdaq: IMMU) for cancer drug candidate sacituzumab govitecan (IMMU-132) and settle the related litigation, with the news sending Immunomedics’ shares up a massive 17.6% to $6.36 on Friday.

The license agreement had not yet closed due to legal action brought by an Immunomedics stockholder challenging the transaction. The termination and settlement remain subject to court approval.

Immunomedics will now develop sacituzumab govitecan, which it licensed to Seattle Genetics in February, on its own. The accord provided for payments of up to $2 billion by Seattle Genetics, of which $250 million was paid upfront. Immunomedics thinks that it will be able to apply for accelerated approval from the Food and Drug Administration in metastatic triple-negative breast cancer (TNBC) at the end of this year or early next year based on the an ongoing Phase II study of sacituzumab govitecan in third-line TNBC. The company plans to start a Phase III trial in the third quarter, which will be used to gain full approval.