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PDL BioPharma inks deal with Bristol-Myers Squibb for multiple myeloma candidate elotuzumab

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REDWOOD CITY, Calif.—A mere 10 months after announcing the company or any of its assets were up for sale—and since having liquidated roughly $500 million in company assets—PDL BioPharma announced last week it struck a development deal with Bristol-Myers Squibb for its promising multiple myeloma candidate elotuzumab.

The deal pays PDL an upfront fee of $30 million with the potential for an additional $480 million based on pre-defined development and regulatory milestones. PDL could earn an additional $200 million in sales milestones for multiple myeloma and other potential oncology indications.

According to PDL, elotuzumab represents a novel approach to treating multiple myeloma because it is an antibody that binds to the CS1 glycoprotein, allowing the immune system to selectively kill myeloma cells with minimal effects on other cell types. CS1 is a cell surface glycoprotein that is widely expressed on multiple myeloma cells but is minimally expressed on normal cells.

"This collaboration and its terms provide a number of key benefits to us," says Andrew Guggenhime, senior vice president and CFO of PDL. "The upfront payment, cost-sharing and potential milestones will help significantly offset the R&D costs for our CS1 antibody programs, reduce the overall burn rate and strengthen the balance sheet for the company."

Under the terms of the agreement, BMS and PDL will share development costs of elotuzumab with BMS funding 80 percent and PDL the remaining 20 percent. The two companies would share profits on any U.S. sales of the antibody and PDL would receive royalties on sales outside the U.S.

BMS also has the option to expand the collaboration to include a second anti-CS1 antibody, PDL241, on completion of pre-agreed preclinical studies. If the option is exercised on PDL241, it has the potential to add another $445 million in upfront and milestone payments.

"[This] transaction mitigates our risk for this program, yet enables us to maintain significant economic participation on the up side should these products reach the market," notes Guggenhime.

This is an important consideration for PDL, as the activity comes at a time when management is actively reshaping the company after its recent asset sales. By the end of the year, the company hopes it will be able to spin out its biotechnology assets into a separate company while PDL retains it antibody humanization assets and related royalty revenue streams.

It also provides the company with the flexibility to redeploy its resources to enhance the diversity of its antibody portfolio, both with the upfront payment, as well as freeing it from solely funding Phase II studies for elotuzumab.

In addition to the deal with BMS, PDL also has ongoing collaborations with Biogen Idec for daclizumab, a potential treatment for multiple sclerosis, and volociximab, currently in Phase II studies as a treatment for solid tumors via inhibition of tumor angiogenesis. DDN

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