* OncoMed to get upfront payments of $177.25 mln
* Celgene to take 5 pct stake in OncoMed
* Celgene stock down 1.4 pct
(Adds CEO, analyst comments, details on deal; updates share
Dec 3 Shares of OncoMed Pharmaceuticals Inc
more than doubled on Tuesday after the biotechnology
company said Celgene Corp would help it develop and
market six of its experimental anti-cancer stem cell drugs.
OncoMed will get upfront payments of $177.25 million,
including $22.25 million for new stock that would give Celgene a
stake of about 5 percent, the companies said.
The deal gives Celgene an entry into the market for
treatments targeting cancer stem cells.
Cancer stem cells play a significant role in the
establishment, spread and recurrence of cancer.
OncoMed said it would conduct the initial clinical studies
on five of the drugs, giving Celgene the option to license them
based on the trial results.
Celgene will also get an option to license OncoMed's most
advanced clinical candidate, demcizumab, during or after the
completion of certain mid-stage trials.
The drug is in early-stage development in combination with
standard-of-care therapy for non-small cell lung cancer and
OncoMed, based in Redwood City, California, is eligible to
receive up to $790 million in development, regulatory and
commercial milestones for demcizumab.
"Demcizumab's substantial early clinical activity warrants
aggressive yet careful evaluation in several indications where
we have strength", said Tom Daniel, Celgene's president of
global research and early development.
OncoMed is eligible to get up to $3 billion in milestone
payments if Celgene exercises all its options and all six drugs
The potential monetary benefits of the deal with Celgene
could take all six drugs through to commercialization, OncoMed
Chief Executive Paul Hastings told Reuters.
OncoMed already has agreements with GlaxoSmithKline Plc
and Bayer AG to develop and market
other anti-cancer stem cell therapies.
OncoMed's stock was up 105 percent at $28.75 in afternoon
trading on the Nasdaq. Up to Monday's close, the company's stock
had halved in value since it went public in July.
Summit, New Jersey-based Celgene will pay $15.13 per share
for its stake in OncoMed. OncoMed's stock closed at $14 on
Monday, valuing the company at about $390 million.
Celgene shares were down 1.4 percent at $160.76.
(Reporting by Natalie Grover in Bangalore; Editing by Savio