Biopharmaceutical company Celgene Corp. (NASDAQ: CELG) is paying $263 million upfront for a 5.9 percent stake in BeiGene, Ltd. (NASDAQ: BGNE), in a cancer immunotherapy deal worth upwards of $1 billion.
Celgene will acquire the rights outside of Asia to BeiGene’s PD-1 inhibitor BGB-A317, which has yet to enter global pivotal trials, and $32.7 million of ordinary shares at $4.58 each, or $59.55 per BeiGene’s American Depositary Shares (ADS).
BeiGene will receive $263 million in upfront license fees and a $150 million equity investment, and will be eligble to receive up to $980 million in development, regulatory, and sales milestone payments. It will also acquire Celgene’s operations in China.
BeiGene's advanced clinical-stage investigational tumor cancer treatment, BGB-A317, is a type of antibody that belongs to a class of immuno-oncology agents known as immune checkpoint inhibitors. The treatment has been tested in over 500 patients, with initial clinical data suggesting that it is well tolerated and exhibits anti-tumor activity across a range of solid tumor types, the companies said.
BGB-A317 has already given up a big head start to rival checkpoint inhibitors from Bristol-Myers Squibb, Merck and the rest of the PD-1/PD-L1 pack. But, while BGB-A317 may arrive too late to make a dent on the monotherapy market, it could still be a useful tool for Celgene as it puts together combinations of cancer drugs to hit solid tumors.
“The acquisition of BGB-A317 significantly accelerates and expands our opportunity to develop and deliver novel T-cell checkpoint inhibitor-based therapies in solid-tumor cancers to patients worldwide and adds to our ongoing PD-L1 FUSION™ program in hematological malignancies,” Celgene CEO Mark J. Alles said in a statement.