Celldex Therapeutics acquires CuraGen and its oncology antibodies for $94.5 million

Deal also bolsters Celldex's financials, allowing it to advance clinical programs into 2012

Lori Lesko
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NEEDHAM, Mass.—Celldex Therapeutics has agreed to pay $94.5 million to acquire Branford, Conn.-based CuraGen Corp., thus gaining a portfolio of 11 oncology-focused antibodies. This includes CuraGen's most advanced—and valuable—therapy, CR011, currently in Phase II studies for breast cancer and unresectable Stages III and IV melanoma.

The deal, announced May 29, also bolsters Celldex's financials as CuraGen brings a cash balance of at least $54.5 million to the table, thus allowing Celldex to advance its clinical development programs into 2012.

Dr. Thomas Davis, Celldex's chief medical officer, stated in a company release, 
"Celldex's expertise in developing novel antibody-based therapeutics will enable us to seamlessly integrate CuraGen's antibody programs into our precision targeted immunotherapy platform and selectively identify and advance the candidates we believe hold the most therapeutic promise."

Sean Cassidy, CuraGen's vice president and CFO, referred to the deal as a "merger" which is expected to close sometime in the third quarter. It has not yet been determined whether Celldex will hire CuraGen employees—and Cassidy is unsure whether he has a position with the company.

The negotiations for acquisition began after CuraGen hired an investment bank to market the company, Cassidy said. In a Feb. 18 press release, Robert E. Patricelli, CuraGen's chairman of the board, said, "The board believes that management is making exciting progress as CR011 moves through the current Phase II clinical trials and that it has taken the necessary actions over the past two years to ensure that CuraGen is a well-capitalized organization in a difficult external financing environment. The board further believes we should consider strategic alternatives that could enhance shareholder value. These alternatives range from selling or licensing CR011, to acquiring additional assets or business lines, to selling the company."

CuraGen president and CEO Timothy Shannon stated in the same press release: "We ended 2008 with $88 million of cash and investments on hand, have a clinically active, attractive Phase II development asset and over $500 million in net operating loss carry-forwards. Yet, our stock price does not reflect the intrinsic value of our assets."

In the most recent press release, Shannon said, "We believe Celldex's immunotherapy expertise and platform technology provide an excellent fit for our antibody portfolio, industry collaborations, technological assets and intellectual property."

Shannon has been invited to join the Celldex board of directors.

CuraGen's tentative position was ripe for the taking—and Celldex moved fast.

The chance to acquire CuraGen "was a unique opportunity to conduct a deal like this that brings two product candidates, 11 fully-owned antibody targets and enough cash that, when combined with our current balance, provides a runway into 2012," says Daniel Budwick, a Celldex company spokesman.

The acquisition also "fulfills a major initiative of the company to identify and bring value-creating, synergistic assets in-house and strengthen the company's balance sheet … and provides 12 fully owned targets from Amgen/Abgenix, with either ready for preclinical development," Budwick says. "So this really fuels the future of the new Celldex company pipeline."

Celldex focuses on the use of tumor-specific targets and human monoclonal antibodies to precisely deliver therapeutic agents through their novel, targeted immunization approach. Celldex's deep pipeline consists of product candidates in varying stages of development, with lead candidate CDX-110, partnered with Pfizer, currently undergoing evaluation in a Phase II clinical trial in newly diagnosed glioblastoma multiforme (GBM) and CDX-1307, currently enrolling in a Phase I study in epithelial tumors.

In addition, the company recently completed the successful preclinical development of CDX-1401, a candidate for study in multiple solid tumors.

CuraGen is expected to deliver $68.6 million in cash, net of acquisition-related costs, including transaction fees, severance payments and a closing balance sheet adjustment. At the close of the transaction, Celldex will assume $14.1 million of CuraGen's 4 percent convertible debt due in February 2011.

Lori Lesko

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