Evotec and Celgene Ink Strategic Oncology Deal with $65 Million Upfront Payment

Celgene

Summit, New Jersey-based Celgene Corporation and Hamburg, Germany-based Evotec AG announced they have inked a long-term strategic partnership to find and develop new cancer drugs.

The partnership will lean on Evotec’s preclinical discovery and development platforms, including its phenotypic screening platform and unique compound libraries. The initial focus will be on solid tumors.

Celgene is paying Evotec $65 million upfront. The company will also be eligible for unidentified but “significant” milestones in addition to tiered royalties on each licensed program.

Cord Dorhman, Evotec’s chief scientific officer, said in a statement, “We are extremely pleased and encouraged about the opportunity to enter into a second major alliance with our colleagues at Celgene. Our first alliance in neurodegenerative diseases has already proven that both companies and teams are united by the same spirit and objectives bringing new and better treatment to patients.”

In December 2016, Celgene and Evotec signed a five-year research-and-development collaboration into neurodegenerative diseases, including amyotrophic lateral sclerosis (ALS), Alzheimer’s disease, and Parkinson’s disease. The research deal focused on Evotec’s induced pluripotent stem cell (iPSC) screening platform. That platform with developed via a research collaboration and licensing deal with Harvard University, especially the CureMotorNeuron initiative, as well as with the company’s 10-year collaboration with the CHDI Foundation.

In that deal, Evotec received $45 million upfront and the possibility of receiving up to $250 million in milestones, as well as double-digit royalties.

Then, in October 2017, Evotec picked up its first milestone from the collaboration, worth $5 million. The payment came after successful completion of a screening program that used the iPSC platform.

Celgene is mostly concerned with oncology, and has been struggling to move beyond Revlimid, its drug for multiple myeloma. Its marketed cancer drugs also include Pomalyst and Thalomid. It also has the BCMA CAR-T bb2121 in its pipeline, which is part of its collaboration with bluebird bio, which they entered into on March 28, 2018. It is under development for relapsed/refractory multiple myeloma.

“Entering into this co-development and co-promotion partnership with Celgene is a significant step forward in building a fully integrated oncology franchise for bluebird and together, we are committed to rapidly advancing development of bb2121 for patients,” Joanne Smith-Farrell, bluebird’s oncology franchise leader and senior vice president, said in a statement at the time. “The collaboration builds upon our extensive research and development capabilities in oncology and is a testament to the strong partnership that exists between our two companies.”

That strong partnership began with a broad strategic collaboration in 2013.

Celgene has had a lot of stumbles in the last year, however. In the fall, it abandoned a Crohn’s disease drug that it acquired in 2014 for $710. Then it missed its earnings estimates and cut a billion dollars from its 2020 sales guidance, largely due to problems for Otezla, its drug for psoriasis, which is being beaten up in the marketplace by newer drugs.

In February, the U.S. Food and Drug Administration (FDA) turned down Celgenes’ application for ozanimod for multiple sclerosis because of insufficient data. Although probably only a delay, it nonetheless threw a wrench in the gears of the company’s projected earnings, since it was forecasting ozanimod sales of approximately $263 million in 2019. Annual sales of the drug are projected to hit $3.46 billion by 2024.

Which partly explains why Celgene is working closely with Evotec again, to try and find promising oncology drugs to bolster its current portfolio and make up for some disappointments in its pipeline.

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