Seattle Genetics has announced a development and license agreement with Immunomedics, Inc. under which Seattle Genetics would receive exclusive worldwide rights to develop, manufacture and commercialize sacituzumab govitecan (IMMU-132). Sacituzumab govitecan is an antibody-drug conjugate (ADC) targeted to TROP-2, which is expressed in several solid tumors including cancers of the breast, lung and bladder. Sacituzumab govitecan is in a phase 1/2 trial for patients with triple negative breast cancer (TNBC), as well as multiple other solid tumors. It received Breakthrough Therapy Designation from the U.S. Food and Drug Administration (FDA) for the treatment of patients with TNBC who have failed prior therapies for metastatic disease. Data from the phase 1/2 trial are intended to serve as the basis for a planned Biologics License Application (BLA) submission under the FDA’s accelerated approval regulations.

"This agreement would add a promising late-stage ADC to our pipeline as we continue making progress towards our goal of becoming a global, multi-product oncology company. Sacituzumab govitecan would complement our existing pipeline by providing a potential near-term opportunity to commercialize a second drug in the United States, expand our international capabilities in Europe and elsewhere and extend our efforts in solid tumors," said Clay Siegall, Ph.D., President and Chief Executive Officer of Seattle Genetics. "In addition, we believe our expertise in ADCs, including demonstrated success in clinical development, regulatory, manufacturing and commercialization, ideally positions Seattle Genetics to advance this program globally. We look forward to working with Immunomedics to advance this program for patients in need, including those with triple negative breast cancer and other solid tumors."

Cynthia L. Sullivan, President and Chief Executive Officer of Immunomedics, said, "After a long and robust process, we concluded that licensing our lead asset, sacituzumab govitecan, to Seattle Genetics, the leading ADC company, would give us the best opportunity to advance this product on behalf of advanced stage cancer patients. Sacituzumab govitecan has the potential to drive significant value for patients with multiple types of cancer who are in need of new therapy options, and we look forward to continuing its development with Seattle Genetics."

Upon closing of the transactions contemplated by the development and license agreement, Immunomedics would receive an upfront payment of $250 million. In addition, Seattle Genetics would pay development, regulatory and sales-dependent milestone payments across multiple indications and geographic regions of up to a total maximum of approximately $1.7 billion, as well as tiered double-digit royalties. The closing of the transactions contemplated by the development and license agreement is subject to customary conditions, including the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended. In addition, for a limited period of time, Immunomedics has the right to continue discussions with a small number of parties that previously expressed interest in licensing sacituzumab govitecan. If a third party provides Immunomedics with a financially superior licensing offer, Seattle Genetics has the right to match any such offer, and if it decides not to match, Immunomedics has the right to accept the superior offer and terminate the proposed development and license agreement upon payment of a termination fee to Seattle Genetics.

Concurrent with the transaction, Seattle Genetics is purchasing approximately $15 million of common stock, representing a 2.8 percent stake in Immunomedics. Seattle Genetics has also been granted the right to purchase an additional 8,655,804 shares of common stock at a price of $4.90 per share for a defined period. The equity purchase and rights are not subject to closing of the development and license agreement.

Seattle Genetics’ 2017 financial guidance provided on and as of February 9, 2017 does not take into account the impact of the transactions contemplated by the development and license agreement or the equity investment in Immunomedics. Seattle Genetics plans to update its 2017 financial guidance after the closing of the transactions contemplated by the development and license agreement.