ImmunoGen signs cancer treatment deal with Novartis

Mon Oct 11, 2010 7:33am EDT

* ImmunoGen to get upfront payment of $45 mln

* Comes after positive data for Roche/ImmunoGen cancer drug

By Katie Reid

ZURICH, Oct 11 (Reuters) - ImmunoGen Inc (IMGN.O) has signed a deal with Novartis (NOVN.VX) that lets the Swiss drugmaker develop anticancer treatments with fewer side effects, ImmunoGen said, giving the U.S. group another boost after recent positive data.

ImmunoGen, which is already working with Sanofi-Aventis (SASY.PA) and Roche (RO.S)(ROG.VX), will get an upfront payment of $45 million from Novartis and is entitled to get milestone payments of potentially up to $200.5 million for each target that results in an anticancer drug.

The group will also receive royalties on any product sales, as well as financial compensation for research and any manufacturing done on behalf of Novartis.

The news comes days after researchers said Roche's experimental breast cancer drug T-DM1, which it is developing with ImmunoGen, delivered a higher response rate with fewer side effects than the standard treatment. [ID:nLDE6971Y3]

T-DM1 is the first of a new kind of "armed antibody" that can carry a cell-killing payload into cancer cells.

ImmunoGen's cancer-cell killing agents are 1,000 to 10,000 times more potent than traditional chemotherapy drugs and the targeted antibody payload (TAP) technology helps to achieve more effective and better tolerated cancer drugs, ImmunoGen said.

"You use it as a targeted ability to deliver a highly potent agent that would kill the cancer cell," ImmunoGen Chief Executive Daniel Junius told Reuters on Monday.

"In this case it is doing it in a fashion that is less aggressive for healthy tissue and therefore doesn't have the side effects you see with many of the traditional chemotherapeutics," Junius said.

At 1012 GMT, shares in Novartis were trading 0.5 percent higher, slightly better than the European healthcare sector index. .SXDP Shares in ImmunoGen were bid around 3 percent higher at $7.30 in pre-market trading, Reuters data showed.

ImmunoGen's main rivals include Seattle Genetics (SGEN.O) and Pfizer (PFE.N) after its acquisition of Wyeth, which had been working on a similar technology. Bristol-Myers Squibb (BMY.N) also bought a company that was working in this area.

Junius said the upfront payment gave the group extra liquidity to work on its own compounds and said ImmunoGen wanted to stay independent as it had "significant opportunity" to develop this technology with its own compounds as well as with its partners.

"Being acquired is not an objective of the company," Junius said when asked whether anyone had approached ImmunoGen.

Speculation over which company could be the next takeover target has taken hold since Sanofi-Aventis launched a $18.5 billion hostile bid for U.S. biotech Genzyme last week. Many investors speculated Swiss biotech Actelion (ATLN.VX) could be the next target. [ID:nLDE6970E3]

ImmunoGen, which has licenses with Amgen (AMGN.O), Bayer Schering Pharma (BAYGn.DE), Biogen Idec (BIIB.O) and Biotest (BIOG.DE), is also speaking to other companies, but Junius said it was still not clear if this would result in more licenses. (Editing by Michael Shields)

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