Roche Scraps Partnership With Seattle Genetics on Lymphoma Drug

Xconomy Seattle — 

If Seattle Genetics is destined to emerge a leading maker of antibody drugs that specifically target diseased cells, it will get there without the help of the world’s dominant player in the market for antibody drugs.

The Bothell, WA-based biotech company (NASDAQ: SGEN) said today that Roche’s U.S.-based Genentech unit has canceled a partnership the companies maintained for the past three years to co-develop dacetuzumab, an antibody for non-Hodgkin’s lymphoma and multiple myeloma. This means that Seattle Genetics will officially get back the full commercial rights to the treatment on June 8, six months after Roche served notice that it was ending the partnership.

The decision came after a portfolio review process at Roche, which has seen a lot of change this year. The Switzerland-based healthcare giant acquired South San Francisco-based Genentech, the world’s most valuable biotech company at the time, in March. Genentech is known as a biotech pioneer that developed or co-developed multi-billion dollar antibodies for cancer such as trastuzumab (Herceptin), rituximab (Rituxan), and bevacizumab (Avastin).

Genentech saw another opportunity in the antibody field when it struck a partnership with Seattle Genetics in January 2007. The bigger company agreed to pay Seattle Genetics $60 million upfront and potential milestone payments of $800 million over time for the right to co-develop daceutuzumab. One of the big ideas was to combine the new Seattle Genetics drug with Genentech’s rituximab. That was thought to be promising because the Seattle Genetics treatment was designed to hit a different target on cells, called CD-40, while the standard Genentech drug is made to block CD-20—and hitting two targets might be a more effective way to overcome resistance tumors eventually develop to treatment.

Seattle Genetics and its partner have seen mixed results with the new antibody this fall. Back in October, Seattle Genetics said it halted a clinical trial of dacetuzumab (formerly known as SGN-40) after an independent panel of safety monitors said mid-way through the study that it was unlikely to reach its goals. That was a big setback—the trial was set to enroll 224 patients with diffuse large B-cell lymphoma.

But this week, right before Genentech pulled the plug on the partnership, Seattle Genetics offered some new data that suggested dacetuzumab might not be toast. A study of 30 patients with diffuse large B-cell lymphoma, who got a different chemotherapy combination regimen than those in the other trial, found that half of the patients had their tumors partially or completely go away. Those new results were presented earlier this week at the American Society of Hematology meeting in New Orleans.

While losing a partner with the name cachet of Genentech is hard to spin around into a positive, Seattle Genetics CEO Clay Siegall did point out in a statement that dacetuzumab wasn’t really the company’s lead drug candidate anyway. That would be brentuximab vedotin, an “empowered antibody” that’s attached to a toxin to make it more potent against tumors. The empowered antibody is being tested in a pivotal clinical trial, and results are expected in the second half of 2010, the company has said. Seattle Genetics owns the full commercial rights to that product.

“We will evaluate available data as we consider possible next steps for the dacetuzumab program,” Siegall said in a statement. “We remain focused on advancing our lead product candidate, brentuximab vedotin.”

Seattle Genetics stock fell 5 percent at the opening bell this morning to $8.49 a share.