Seattle Genetics and GSK sign ADC collaboration agreement

Seattle Genetics, Inc. (NASDAQ:SGEN), announced today that it has entered into a collaboration agreement with GlaxoSmithKline (GSK) under which GSK will pay an upfront fee of $12 million for rights to utilize Seattle Genetics’ antibody-drug conjugate (ADC) technology with multiple antigens to be named by GSK.

“We now have nine ADC licensees and we have generated more than $35 million during 2009 from new and ongoing ADC collaborations.”

“By collaborating with leading companies such as GSK, we are broadening the reach of our proprietary ADC technology while also generating substantial non-dilutive capital for Seattle Genetics,” said Eric L. Dobmeier, Chief Business Officer of Seattle Genetics. “We now have nine ADC licensees and we have generated more than $35 million during 2009 from new and ongoing ADC collaborations.”

GSK is responsible for research, product development, manufacturing and commercialization of all ADC products under the collaboration. Seattle Genetics is eligible to receive from GSK up to $390 million in milestones if all ADCs in the collaboration are commercialized as well as mid-single digit royalties on worldwide net sales of any resulting ADC products. Seattle Genetics also will receive material supply and annual maintenance fees as well as research support payments for assistance provided to GSK under the collaboration.

ADCs are empowered monoclonal antibodies that carry potent, cell-killing drugs. Seattle Genetics has developed proprietary technology employing synthetic, highly potent drugs that can be attached to antibodies through stable linker systems. The linkers are designed to be stable in the bloodstream and release the drugs under specific conditions once inside targeted cells. This approach is intended to spare non-targeted cells and thus reduce many of the toxic effects of traditional chemotherapy.