ImmunoGen Gets $45M Upfront From Novartis To Make Souped Up Antibodies For Cancer

Xconomy Boston — 

[Updated: 8:40 am Eastern] ImmunoGen has struck a lucrative new deal with Novartis to make antibody drugs for cancer that are more potent than what physicians have come to embrace over the past decade.

Waltham, MA-based ImmunoGen (NASDAQ: IMGN) said today it will get a $45 million upfront payment from Novartis in exchange for the exclusive right to use its technology to make potent antibodies against “several” targets to be picked by Novartis. ImmunoGen stands to get just over $200 million in milestone payments for each target that leads to a cancer drug, plus royalties on product sales. Novartis will pay all the development expenses for the drug candidates, and will finance some research and manufacturing at ImmunoGen.

Standard, or so-called “naked” antibodies have been around more than a decade, and now generate an estimated $30 billion in sales. The idea at ImmunoGen is to take the precision targeting capability of an antibody, and make it better at killing tumors by loading it with tiny doses of super-potent toxins. Scientists at ImmunoGen and other companies have been pursuing this idea for three decades with no real commercial success to show for it, although some convincing data has emerged in the last year for the concept. Roche’s U.S.-based Genentech unit, using ImmunoGen’s technology to link an antibody to a toxin, has shown impressive clinical trial data for a breast cancer drug called T-DM1. And a competitor of ImmunoGen’s, Seattle Genetics, has also recently shown a striking anti-tumor effect with its souped-up antibody drug for rare lymphomas.

Besides Roche/Genentech, ImmunoGen already has deals to license its technology to Paris-based drug giant Sanofi-Aventis (NYSE: SNY), Germany-based Bayer, and Thousand Oaks, CA-based Amgen (NASDAQ: AMGN).

[Updated: 8:40 am Eastern] “Once favorable clinical trial data was reported, the value of our technology rose,” said ImmunoGen CEO Dan Junius, on a conference call with analysts. He added: “We’re very happy with how this  ended up.”

ImmunoGen also updated its financial forecast for the fiscal year that ends June 30, 2011. The company said it plans to use between zero and $4 million of its cash and investments for the fiscal year, ending up with $106 million to $110 million, enough to fund operations through the 2013 fiscal year.