Biotech Bestie Celgene Takes Stake, Inks $1 Billion+ Deal With BeiGene

Biotech Bestie Celgene Takes Stake, Inks $1 Billion+ Deal With BeiGene July 6, 2017
By Mark Terry, Breaking News Staff

Celgene Corporation , based in Summit, NJ, launched a strategic collaboration deal with Beijing, China’s BeiGene (BGNE) to develop and commercialization BGB-A317, a PD-1 inhibitor for solid tumors. And it’s a big deal, in several ways, including monetarily -- $263 million upfront as a licensing fee, $150 million for an equity stake in BeiGene, and $980 million in potential milestone payments. That’s a total of $1.4 billion.

Celgene acquires the rights to develop and market the PD-1 compound in the U.S., Europe, Japan and the rest of the world outside Asia. BeiGene will hold exclusive rights for BGB-A317 for hematological malignancies globally and for solid tumors in Asia except for Japan.

In addition, BeiGene will acquire Celgene’s commercial operations in China, as well as take on an exclusive license to commercialize Celgene’s Abraxane, Revlimid and Vidaza in China.

BGB-A317 is a second-generation PD-1 inhibitor, differentiated from the currently approved PD-1 antibodies by an engineered Fc region. This is designed to minimize interactions with other immune cells. It is currently being developed as a monotherapy, as well as in combo therapies for solid tumors. It is presently in two clinical trials in China, and global pivotal studies are planned to begin in 2018.

The two companies will collaborate on BGB-A317’s global development. BeiGene continues to hold the rights to develop it in hematology and in combination with other portfolio compounds.

“The acquisition of BGB-A317 significantly accelerates and expands our opportunity to develop and deliver novel T-cell checkpoint inhibitor-based therapies in solid tumor cancers to patients worldwide and adds to our ongoing PD-L1 FUSION program in hematological malignancies,” said Mark Alles, Celgene’s chief executive officer, in a statement. “China is an important market for Celgene, and our collaboration with BeiGene positions us exceptionally well to optimize research, manufacturing, and the long-term commercial potential of our portfolio in China.”

John Carroll, writing for Endpoints News, notes, “BeiGene also gets rights to Celgene’s C-122, a next-gen CelMOD currently in development for lymphoma and hepatocellular carcinoma. And BeiGene is committed to beefing up its manufacturing operations to support the partnership in Asia.”

A generally accepted therapeutic, PD-L1 and PD-1 is currently approved in five therapies in the U.S. The companies involved include Merck and Bristol-Myers Squibb , Roche , Pfizer /Merck KgaA and AstraZeneca . Carroll writes, “But they keep coming. Celgene’s checkpoint will start a pivotal global program next year, making it a distinctly late entry in the field.”

So far, BGB-A317 has been tested in more than 500 patients. Early clinical data suggests the therapeutic is well tolerated and shows anti-cancer activity across a range of solid tumor types.

Celgene is currently trading for $133.20.

BeiGene is currently trading for $52.27.

Brian Skorney, an analyst with Baird, upped his price target for BeiGene from $44 per share to $58, granting it an “outperform” rating after the announcement of the Celgene deal. He called the deal “shockingly good for BeiGene.” “This strategic partnership with Celgene is a transformational event for BeiGene, transitioning us into a commercial-stage company and preparing us well for the future potential launch of our internally developed compounds, some of which are already in pivotal trials in China,” said John Oyler, co-founder, chairman and chief executive officer of BeiGene, in a statement. “Aligned in our mission and therapeutic focus, we believe that we have forged a promising alliance with Celgene that will help both companies fulfill their ultimate commitments of bringing new, life-altering treatments to patients in China and worldwide.”

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