A Win for venBio as Judge Hits Pause on Immunomedics's $2 Billion Deal With Seattle Genetics
March 10, 2017
By Alex Keown, BioSpace.com Breaking News Staff
MORRIS PLAINS, N.J. – Shares of Immunomedics jumped more than 12 percent on Thursday after a judge temporarily halted its licensing deal with Seattle Genetics , following a legal challenge filed by activist investor venBio Select Advisor LLC.
Immunomedics stock continued to show some upward mobility today, hitting a high of $5.95 per share, although it has slipped since, falling to $5.93 per share as of 10:46 a.m.
On Thursday, J. Travis Laster, a judge in the Delaware Chancery court, issued a 30-day restraining order delaying the close of the deal between the two companies.
In February, Immunomedics and Seattle Genetics inked a deal worth up to $2 billion to develop IMMU-132, Immunomedics' proprietary solid tumor therapy candidate for patients with metastatic triple-negative breast cancer.
However, just a few days later, venBio, which owns just under 10 percent of Immunomedics stock, launched its opposition campaign. Behzad Aghazadeh, managing partner of venBio, condemned the deal and said the current company leadership was giving away “its crown jewel.” venBio has a slate of candidates it has been hoping to place on the company board of directors and said the deal with Seattle Genetics is an attempt to derail support for those board candidates, which have also been supported by proxy advisory firms ISS, Glass Lewis and Egan Jones. The company shareholder meeting was held March 3, but the results have not yet been made public.
Not only did Aghazadeh condemn the timing of the deal with Seattle Genetics, he also said the deal is a blow to stockholders because Seattle Genetics is able to acquire 10 percent of the company at a price he said was too low, $4.90 per share.
IMMU-132, sacituzumab govitecan, is a novel antibody-drug conjugate that binds to a protein found on many cancer cells called TROP-2. By bonding with the cancer cells, IMMU-132 can then deliver a dose of a chemo agent into the cell, hopefully killing it. IMMU-132, its lead investigational antibody-drug conjugate, sacituzumab govitecan, earned a Breakthrough Therapy designation by the U.S. Food and Drug Administration in February 2016. Under terms of the deal with Seattle Genetics, that company was set to become responsible for initiating a Phase III trial of IMMU-132 in patients with metastatic triple-negative breast cancer and submit the initial application or approval with the U.S. Food and Drug Administration. The agreement includes the development of additional indications for IMMU-132, including urothelial cancer (UC), small-cell lung cancer (SCLC) and non-small-cell lung cancer (NSCLC), which are currently in Phase II clinical studies, along with other solid tumor indications being studied in ongoing clinical trials.