Activist investor venBio had a good Friday. Seattle Genetics and Immunomedics did not. The two latter companies agreed to fold on their $2 billion oncology deal, while Immunomedics’ CEO and CSO also forfeited their jobs.
First announced in February, the deal promised Seattle Genetics exclusive worldwide rights to sacituzumab govitecan (IMMU-132), an antibody-drug conjugate (ADC) for metastatic triple-negative breast cancer (mTNBC). Complete with a breakthrough designation, IMMU-132 was on the cusp of FDA approval. In return, Immunomedics would receive $250 million upfront and up to $1.7 billion in milestone payments and tiered double-digit royalties if the drug succeeded.
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But behind the scenes, venBio wasn’t having any of it. The group moved quickly to get a 30-day hold on the agreement, arguing that it was not in the best interests of Immunomedics’ shareholders.
“We announced the deal and very soon after that venBio sued to block the deal,” said Seattle Genetics COO Eric Dobmeier via phone. “So that was the first sign that we might be stuck in some legal wrangling before we could close.”
The agreement was never finalized, which kept the damages low for Seattle Genetics. Dobmeier summed it up as a missed opportunity.
“I’m disappointed in the outcome, but I’m not disappointed that we took a shot at this.” Dobmeier declared. “I do continue to believe that we were the right partner, this was a strong deal and we would have gotten this drug to patients quicker if we would have been involved.”
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As a leader in ADCs, the Seattle, Washington-based company was a natural partnership fit. Its lead candidate Adcetris (brentuximab vedotin) is already on the market, validating the company’s approach to the unique regulatory, manufacturing, clinical, and commercial challenges of this complex class of drugs.
But it seems Immunomedics today is a different company from the one that negotiated the deal earlier this year.
“Immunomedics is now controlled by their activist shareholder and they have a different plan in mind,” Dobmeier said. “They want to raise money, which they’ve already done, they want to replace management, and they want to take this drug forward on their own.”
Immunomedics buried its half of today’s news in an aggregate media release titled: “Immunomedics delivers business updates, announces private placement offering and outlines strategic steps to drive stockholder value.”
In it, the Morris Plains, New Jersey-based company notes the termination of its previously announced licensing deal with Seattle Genetics, along with a “leadership transition.” President and CEO Cynthia Sullivan will step down, along with her husband David Goldenberg, Immunomedics’ founder and CSO. Goldenberg will continue to serve as a board director.
Are there any lessons learned?
“We felt like the deal was a strong deal and fair to both parties,” Dobmeier said. “I don’t think we pushed too hard. We both negotiated hard but ultimately I think it was a good deal.”
IMMU-132 had solid Phase 1/2 data and a breakthrough therapy designation. With a clear unmet need, FDA approval commercialization seemed just around the corner.
In 85 patients with a metastatic form of the disease, IMMU-132 showed an objective response rate of 29 percent and a median duration of response of 10.8 months. For all 89 patients in the intent-to-treat population, the estimated median overall survival was 18.8 months.
“When we started looking at this a long time ago, what caught our attention was durability,” Seattle Genetics CEO Clay Siegall told MedCity in February.
As part of the termination, Seattle Genetics will continue to hold 3.0 million shares of Immunomedics common stock, as well as a warrant to purchase an additional 8.7 million shares at $4.90 per share exercisable until December 31, 2017. The parties have agreed to fully settle, resolve and release each other from all disputes, claims, and liabilities
Immunomedics’ shareholders seem pleased to have the litigation over and the promising drug back. Its shares finished the day up 17 percent.
Photo: DNY59, Getty Images