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cut licensing deals for any current and future Forma drug programs, Forma would keep U.S. rights. Celgene would only be able to bring all those rights in-house through a buyout, meaning that if it decided to walk away, Forma would still have commercial rights to the programs the two had been working on together in the largest pharmaceutical market in the world, with Celgene picking up the development tab. Forma would also maintain full rights to any other programs it comes up with that Celgene doesn’t pick up—and could presumably sell or partner them off to generate more revenue, or returns for shareholders.
“At no point are we suddenly in a situation where they don’t go all the way, and we’re left with screening hits or something like that as the only value in the company,” Tregay says. “A lot of this is really understanding what drives and aligns motivations, and then structuring a deal such that the deal doesn’t get in the way of those aligned cultures and motivations. [In our case], if we part ways, Forma’s fully empowered to become a U.S. commercial enterprise.”
Forma will consult with Celgene, but ultimately has the final say as to which targets to go after and which compounds to develop into drugs. It’ll take the lead on the preclinical work, and then move the experimental drugs that come out of that work through Phase 1 testing. At that point, Forma would hand them over to Celgene, which, assuming it opts to license the drug candidates, would cover all the associated costs of further trials.
The deal builds out of the original transaction Forma struck with Celgene a year ago. In April 2013, Celgene agreed to pay $200 million in up front plus future payments for non-U.S. rights to certain compounds that Forma discovers. That deal, however, only centered around the field of protein homeostasis, or the ability of cells to properly manufacture or deactivate proteins.
This time around, Forma will focus on a different, specific set of targets during each collaboration period that fit within an established strategy. Tregay says some of the ideas under consideration are epigenetics and tumor metabolism, but that Forma may branch out from there—maybe rare diseases, for example—depending on “where the biology may take us.”
Forma has struck partnerships with a list of other big companies, like Genentech, Boehringer Ingelheim, Johnson & Johnson, and Eisai Pharmaceuticals, bringing in more than $300 million in partnership revenue to date. Though its shareholders haven’t gotten a piece of that action as of yet, Forma has options. It established an LLC structure last year, for instance, and that gives it the ability to hive off a program that Celgene doesn’t take on after Phase 1 testing, and flip it to someone else for a shareholder return.
As recently as last year, Forma appeared to be headed towards an IPO. Should the Celgene courtship turn into a marriage, that obviously won’t be the case anymore. But given Forma can now pour most of its cash into research, and not worry about development costs, Tregay doesn’t have any regrets.