Transgene seeks partner for TG4010 as Novartis opts out

There was disappointing news for French biotech firm Transgene (Euronext Paris: TNG) today, when it received notification from Novartis (NOVN: VX) that the Swiss drug major has decided not to exercise its option for the global development and commercialization rights to TG4010 MUC1 targeted cancer immunotherapy. As a result, Transgene retains all rights to the program.

“We regret that Novartis has chosen not to use its exclusivity period to opt-in and become our global partner for TG4010,” said Philippe Archinard, chairman and chief executive of Transgene, which had been set to get as much as 700 million euros ($970 million) in milestones from the collaboration, which included a non-refundable 10 million euros upfront (The Pharma Letter March 11, 2010).

Transgene’s stock fell as much as 21%, the biggest intraday decline since June 2009, and was down 12.5% at 9.59 euros by midday.

“Novartis’s decision increases uncertainty around Transgene and the valuation will mainly rely on the ability to strike a new deal for TG4010,” Mathieu Chabert, an analyst at Bryan Garnier & Co, reported by Bloomberg.