Celgene caps Quanticel alliance with acquisition

Celgene will acquire Quanticel for $100 million up front, with the potential for as much as $385 million in contingent milestone payments

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SUMMIT, N.J. & SAN DIEGO—Celgene Corp. has announced the signing of a definitive share purchase agreement, by which it will acquire Quanticel Pharmaceuticals, a private drug discovery company focused on developing breakthrough medicines for treating cancer.
Per the terms of the agreement, Celgene will acquire Quanticel for an upfront payment of $100 million in cash, with the potential for up to an additional $385 million in contingent payments based on research, development and regulatory advances related to Quanticel's research and development platform. The transaction is subject to customary closing conditions, including the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Act. Celgene expects this transaction will be neutral to 2015 adjusted diluted earnings guidance.
"This acquisition brings into Celgene a highly productive, innovative organization deploying a unique platform of high strategic value" Dr. Tom Daniel, president of Research and Early Development for Celgene, commented in a press release. "More than acquiring the great team, the novel technology and the drug candidates, the deal validates an innovative approach to building organizational capabilities."
This is far from the first time the companies have had dealings with each other; in fact, the deal caps off a multi-year alliance between Celgene and Quanticel. The two struck an exclusive, strategic collaboration in 2011 to discover and develop first-in-class cancer drugs. The deal called for Celgene to pay Quanticel $45 million during the three-and-a-half-year term of the alliance in addition to taking an equity stake in Quanticel; in return, Celgene received an exclusive option to acquire Quanticel. The agreement focused on Quanticel levering its platform to perform single-cell genomic analysis of patient tumor samples and identify predictive biomarkers for certain of Celgene's investigational drugs. Quanticel would also apply its platform to perform independent drug discovery to generate its own candidates, which Celgene would have the option of access through its acquisition option.
Through this newly announced agreement, Celgene has full access to Quanticel's proprietary platform, as well as its lead programs that target specific epigenetic modifiers to advance Celgene's pipeline. Quanticel's platform is based on the work of its scientific founders, Dr. Stephen Quake and Michael Clarke, and combines “insights in tumor heterogeneity with single-cell bioengineering to understand mechanisms of tumor sensitivity and resistance and to discover and develop first-in-class therapeutics,” as noted on the company's website.
"Celgene made clear from the start that they valued both our technology and our team, and this resulted in an extremely collaborative and productive partnership over the past three years," Dr. Steve Kaldor, CEO at Quanticel, noted in a statement regarding the share purchase agreement. "We look forward to supporting the continued maturation of our pipeline and platform as a part of the Celgene organization."
Zacks Equity Research commented in a note on its anaylst blog that “Being a company focused on the development and commercialization of therapies for the treatment of cancer and inflammatory diseases through gene and protein regulation, Celgene may benefit by gaining access to Quanticel’s technology platform for single-cell genomic analysis of human cancer. Besides, with the addition of multiple candidates from Quanticel’s pipeline, Celgene’s pipeline may receive a significant boost.”

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