Clinical stage biotechnology company Seattle Genetics, Inc. (SGEN) Monday said it has entered into a collaboration agreement with UK-based GlaxoSmithKline Plc (GSK,GSK.L), pursuant to which GlaxoSmithKline will pay an upfront fee of $12 million for rights to utilize Seattle's antibody-drug conjugate, or ADC, technology with multiple antigens to be named by GlaxoSmithKline.
As per the agreement terms, GlaxoSmithKline is responsible for research, product development, manufacturing and commercialization of all ADC products under the collaboration.
According to the deal, Seattle is eligible to receive up to $390 million in milestones from GlaxoSmithKline if all ADCs in the collaboration are commercialized as well as mid-single digit royalties on worldwide net sales of any resulting ADC products. In addition to this, Seattle will also receive material supply and annual maintenance fees as well as research support payments for assistance provided to GlaxoSmithKline under the collaboration.
ADCs are empowered monoclonal antibodies that carry potent, cell-killing drugs. Seattle said it has developed proprietary technology employing synthetic, highly potent drugs that can be attached to antibodies through stable linker systems. The linkers are designed to be stable in the bloodstream and release the drugs under specific conditions once inside targeted cells. The approach is intended to spare non-targeted cells, thereby reducing many of the toxic effects of traditional chemotherapy.
Commenting on the deal, Seattle's chief business officer Eric Dobmeier said, "By collaborating with leading companies such as GSK, we are broadening the reach of our proprietary ADC technology while also generating substantial non-dilutive capital for Seattle Genetics."
Currently, Seattle has nine ADC licensees and has generated over $35 million during 2009 from new and ongoing ADC collaborations.
In Friday's regular trading session, SGEN closed trading on the Nasdaq at $9.17 per share on a volume of 5,100 shares. In the past 52-week period, the shares have been trading in a range of $7.00 to $14.94.
GSK closed Friday's regular trading session at $41.80 per share on the New York Stock Exchange. In the past 52-week period, the shares have been trading in a range of $27.15 to $43.47.
GSK.L is currently trading on the London Stock Exchange at 1,300.50 pence per share up 5.00 pence or 0.39% on a volume of 2.37 million shares. In the past 52-week period, the shares have been trading in a range of 982.00 pence to 1,332.50 pence.
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