Celldex Therapeutics has been trying to bounce back ever since its lead drug, a cancer vaccine, fell short in clinical trials earlier this year. Today it has acquired privately held Kolltan Pharmaceuticals to help with that plan.
Hampton, NJ, and Needham, MA-based Celldex is paying Kolltan shareholders with $62.5 million worth of Celldex stock. The acquisition delivers a new group of cancer drugs to Celldex’s portfolio.
The deal includes $172.5 million in possible future payments to Kolltan’s shareholders—among them Fidelity Investments, KLP Enterprises, Deerfield Management, and Osage University Partners—should Kolltan’s experimental drugs do well in clinical trials.
Kolltan, of New Haven, CT, started up in 2007 and was co-founded by Yale University pharmacology professor Joseph Schlessinger, who also founded Plexxikon, which Daiichi Sankyo acquired for $805 million in 2011. Kolltan filed for an IPO in September 2014, but pulled the offering just a few months later.
Kolltan has been developing cancer drugs that target receptor tyrosine kinases (RTKs). These receptors are involved in several cell signaling activities, and when mutated, can be implicated in a variety of diseases, including cancer. Kolltan believes that its drugs might help overcome the resistance that tumors can develop to other therapies, among them tyrosine kinase inhibitors—a common type of cancer drug. Its lead drug candidate KTN0158, for instance, is in early testing in patients with gastrointestinal stromal tumors. Celldex says the drug might be effective for people with GIST tumors who no longer respond to Novartis’ imatinib (Gleevec). A second Kolltan drug, KTN33709, has shown promise treating some patients whose cancers have become resistant to Eli Lilly’s cetuximab (Erbitux). Both of Kolltan’s experimental drugs are in early-stage trials.
For Celldex, the deal enables it to diversify its drug pipeline after its most advanced cancer drug—a brain cancer vaccine called rindopepimut—failed a Phase 3 trial in March. That was a huge setback that eviscerated the company’s market value. Shares of Celldex traded at roughly $30 apiece in early 2015 as the company was still advancing rindopepimut in clinical trials, but they now trade at just over $3 apiece.
Celldex said it would not put any more resources into rindopepimut after the bad news hit, and has since been trying to rally around its other drugs. These include the antibody drug varlilumab and the antibody-drug conjugate glemtumumab vedotin. Kolltan’s drugs give Celldex more options going forward. Celldex says it may test Kolltan’s drugs in combination with its own. KTN0158, for instance, might be useful when paired with immunotherapy drugs, like varlilumab, the company says. Counting the Kolltan assets, Celldex now has seven cancer drug candidates in its portfolio. Varlilumab and glemtumumab vedotin are each in mid-stage trials.