Seattle Genetics and Agensys expand ADC collaboration

Seattle Genetics, Inc. (Nasdaq: SGEN) and Agensys, Inc., an affiliate of Astellas, announced today an expansion of the companies’ antibody-drug conjugate (ADC) collaboration. Under the amended agreement, Agensys will pay a $12 million fee for exclusive rights to ADC licenses against additional antigen targets. Seattle Genetics also receives an option to co-develop another ADC at the time of investigational new drug (IND) submission.

“Combining Agensys’ proprietary antibodies, directed to novel cancer targets, with Seattle Genetics’ industry-leading ADC technology has already led to product candidates for different cancer indications, including ASG-5ME, an ADC for cancers including prostate, pancreatic and gastric that is being co-developed by both companies,” said Aya Jakobovits, Ph.D., Executive Vice President and Head of Research and Development of Agensys. “Expansion of the collaboration will allow Astellas to further enhance its growing pipeline in oncology.”

“Through this broadened collaboration, we continue to leverage the increasing value of our ADC technology to generate revenue as well as to obtain product rights that expand our pipeline of ADCs for the treatment of cancer,” said Eric L. Dobmeier, Chief Business Officer of Seattle Genetics. “We look forward to continuing our work with Agensys to bring ADC programs into clinical trials, including ASG-5ME planned for phase I trials in 2010.”

Seattle Genetics and Agensys originally entered into the ADC collaboration in January 2007, under which the companies agreed to co-develop and co-fund an initial ADC program, ASG-5ME, and share equally in any profits upon commercialization. Agensys also received the right to obtain exclusive ADC licenses to three other cancer targets, and Seattle Genetics received the right to exercise an option to co-develop and commercialize any one of those additional ADC programs at IND submission in exchange for 50:50 cost and profit-sharing. For ADC programs solely developed and commercialized by Agensys/Astellas, Seattle Genetics is entitled to receive fees, milestones and royalties.

Under the expanded collaboration, Agensys receives the right to obtain exclusive ADC licenses for multiple additional targets in exchange for payment of the upfront fee. Seattle Genetics also receives an option for 50:50 cost and profit-sharing of a third ADC program at IND filing. The remaining ADC programs will be developed and commercialized exclusively by Agensys. Seattle Genetics is entitled to progress-dependent fees, milestone payments and mid-single digit royalties on worldwide net sales of ADC products developed and commercialized solely by Agensys. Under the terms of the amendment, Seattle Genetics is eligible to receive up to $250 million in development milestones and $100 million in sales milestones if all of the additional ADC programs are successful.

Agensys utilizes its portfolio of novel cancer targets to generate high affinity fully human, proprietary antibodies, and combines selected antibodies with the ADC technology to produce new cancer therapies. ADCs utilize the targeting ability of monoclonal antibodies to deliver potent, cell-killing payloads to specific cells. Seattle Genetics’ technology employs synthetic, highly potent drugs attached to antibodies through proprietary linker systems. The linkers are designed to be stable in the bloodstream but to release the drug payload under specific conditions once inside target cells, thereby sparing non-target cells many of the toxic effects of traditional chemotherapy.