Seattle Genetics, Genentech expand antibody-drug conjugate collaboration

Seattle Genetics, Inc.Aug 12 2010

Seattle Genetics, Inc. (NASDAQ:SGEN) announced today that it has expanded its antibody-drug conjugate (ADC) collaboration agreement with Genentech, Inc., a member of the Roche Group (SWX:RO) (SWX:ROG) (Pink Sheets:RHHBY). Under the expanded agreement, Genentech will pay an upfront fee of $12 million for rights to utilize Seattle Genetics' ADC technology with additional antigens to be named by Genentech.

“We are pleased to continue our ADC collaboration with Seattle Genetics. We believe ADCs will play an important role in the future of cancer therapy. Genentech is committed to exploring the therapeutic potential of ADCs in a variety of hematologic malignancies and solid tumors”

Genentech is responsible for research, preclinical and clinical development, manufacturing and commercialization of ADCs under the expanded agreement. Pursuant to the terms of the expansion, Seattle Genetics is eligible to receive more than $900 million in fees and milestones if all ADCs in the expanded portion of the collaboration are commercialized, as well as mid-single digit royalties on worldwide net sales of any resulting ADC products. Seattle Genetics is also eligible to receive annual maintenance fees and research support payments for potential assistance if requested by Genentech under the collaboration.

Seattle Genetics and Genentech established an initial ADC collaboration in 2002, under which Genentech has paid more than $30 million in collaboration payments. Under that agreement, Seattle Genetics is eligible to receive more than $500 million in milestone payments if all ADCs in the initial collaboration are commercialized, as well as mid-single digit royalties on worldwide net sales of any resulting ADC products.

"This expansion of our ADC collaboration with Genentech is another indication of the increasing value of our proprietary ADC technology," said Eric L. Dobmeier, Chief Business Officer of Seattle Genetics. "Our ongoing ADC collaboration with Genentech has resulted in multiple preclinical and clinical milestones, and we look forward to their continued progress with product candidates utilizing our ADC technology over the next several years."

"We are pleased to continue our ADC collaboration with Seattle Genetics. We believe ADCs will play an important role in the future of cancer therapy. Genentech is committed to exploring the therapeutic potential of ADCs in a variety of hematologic malignancies and solid tumors," said James Sabry, M.D., Ph.D., Vice President, Genentech Partnering.

ADCs are monoclonal antibodies that selectively deliver potent anti-cancer agents to tumor cells. With over a decade of experience and knowledge in ADC innovation, Seattle Genetics has developed proprietary technology employing synthetic, highly potent cell-killing agents called auristatins (such as MMAE and MMAF) and stable linker systems that attach auristatin to the antibody. Seattle Genetics' novel linker systems are designed to be stable in the bloodstream and release the potent cell-killing agent once inside targeted cancer cells. This approach is intended to spare non-targeted cells and thus reduce many of the toxic effects of traditional chemotherapy while enhancing the antitumor activity. Seattle Genetics has generated more than $130 million through its ADC technology license agreements with leading biotechnology and pharmaceutical companies.