Genentech Agrees to Pay Seattle Genetics Up to $900M for “Empowered Antibodies”

Xconomy Seattle — 

Genentech and Seattle Genetics have been working together for eight years on how to make antibody drugs that can really firebomb cancer cells, and today they are raising the ante in a big way.

Seattle Genetics (NASDAQ: SGEN) said today that Genentech, the U.S.-based unit of Roche, has agreed to pay $12 million in upfront cash for a license to technology that links targeted antibody drugs to toxins that make them more potent against cancer. Genentech will pick which targets on cancer cells it wants to direct “empowered antibodies” against, and it will pay the expenses for developing the drugs. Seattle Genetics will be eligible to receive as much as $900 million in milestone payments if the drug candidates reach certain goals in development, plus royalties worth a “mid-single digit” percentage of product sales.

Genentech first began using the Seattle Genetics linking technology in 2002, and has paid Seattle Genetics more than $30 million for what it calls its antibody-drug conjugate technology. This has long been considered one of Genentech’s new frontiers. The biotech pioneer has had its biggest success as a company with so-called “naked” antibodies that are make to specifically seek out targets on cancer cells, like trastuzumab (Herceptin) and bevacizumab (Avastin). But patients eventually resist those drugs over time, so Genentech has increasingly sought to improve on its antibody strategy by linking antibodies to toxins to give them more tumor-killing punch.

“We believe antibody-drug conjugates will play an important role in the future of cancer therapy. Genentech is committed to exploring the therapeutic potential of ADCs in a variety of hematologic malignancies and solid tumors,” said James Sabry, vice president of partnering at Genentech, in a statement from Seattle Genetics.

Genentech has had its most visible success with a souped-up version of Herceptin called T-DM1, which uses a linking technology from Waltham, MA-based ImmunoGen (NASDAQ: IMGN). Based partly on what it learned from that experience, Genentech says it has about 50 more of these “empowered” antibodies in its pipeline, mostly in early stages of development. You can read more about how Genentech developed T-DM1 in this in-depth feature we published in June.