OncoMed, Celgene ink multi-million dollar cancer agreement

Per the terms of the agreement, Celgene will pay OncoMed $155 million up front, in addition to purchasing roughly $22.25 million of newly issued shares of OncoMed common stock in a private placement. The stock will be priced at $15.13 per share. OncoMed will be in charge of initial clinical studies, after which Celgene will have an option to license the worldwide rights to up to six novel anti-CSC therapeutic candidates, as well as research, development and commercialization rights to certain compounds in an undisclosed CSC pathway. OncoMed will retain global co-development and U.S. co-commercialization rights for five of the six candidates, with 50/50 profit sharing in the United States and royalties in other territories.

“Through this major alliance with Celgene, we gain substantial resources that will enable us to continue to discover and develop new therapeutics independently while positioning OncoMed for substantial potential downstream value and profits. Importantly, by retaining co-development and co-commercialization rights to up to five biologic product candidates in our pipeline, we expect to add commercial capabilities to our core research and development competencies as we continue to build a premier oncology biotherapeutics company,” Paul J. Hastings, chairman and CEO of OncoMed, commented in a statement. “Celgene is a preeminent biopharmaceutical innovator with a successful track record of translating unique science into disease-altering therapies that benefit patients, healthcare and society. We can greatly benefit from their expertise and look forward to many years of successful collaboration.”

Demcizumab, which is currently being studied in a trio of Phase Ib clinical studies, including one for pancreatic cancer and another for advanced non-small cell lung cancer, is a monoclonal antibody designed to selectively target Delta-like ligand 4 (DLL4). DLL4 is an activator of Notch signaling, “a pathway known to be important in cancer stem cells and cancer,” OncoMed notes on its website. Blocking DLL4 has been shown to provide broad-spectrum anti-tumor activity through a variety of mechanism, including the disruption of angiogenesis, the inhibition of cancer stem cell growth and the promotion of cell differentiation.

If the option for this compound is exercised, Celgene and OncoMed will co-develop it and share development costs on a 2/3 and 1/3 basis, respectively. Afterwards, it will be co-commercialized in the United States under a 50/50 profit-sharing model. Beyond the United States, development and commercialization will be led by Celgene, and OncoMed stands to receive milestones and tiered double-digit royalties on sales. The other programs covered under this agreement are five preclinical or discovery-stage biologics programs from OncoMed: an anti-DLL4/VEGF bispecific antibody and up to four other programs targeting either the RSPO-LGR CSC pathway or another undisclosed CSC pathway.

There will also be option exercise payments and milestone payments on a per-program basis for the agreement, which could total up to $790 million for demcizumab, up to $505 million for the anti-DLL4/VEGF antibody and approximately $440 million for each of the other four biologics. OncoMed also stands to receive more than $100 million for the small-molecule program.

“We are very pleased to enter into this broad based collaboration with OncoMed, one that holds great promise for cancer patients. Demcizumab’s substantial early clinical activity warrants aggressive yet careful evaluation in several indications where we have strength, including non-small cell lung cancer and pancreatic cancer,” Tom Daniel, president of Global Research & Early Development at Celgene, said in a press release. “The earlier partnerships in the RSPO-LGR and another, undisclosed cancer stem cell pathway provide us complementary and strategically valuable targeting opportunities across both biologic and small-molecule modalities in the cancer stem cell arena where OncoMed has provided leadership and great strength.”