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AbbVie hands Genmab $750M in latest bid to grow cancer drug business.

AbbVie will ally with Danish drug developer Genmab to co-develop as many as seven cancer therapies in a deal potentially worth billions of dollars. For $750 million upfront, AbbVie gains rights to three early-stage Genmab drugs that can target two cell proteins at once, a type of treatment known as a bispecific antibody. The two companies will also work together to discover and advance four new antibody drugs for cancer.

The deal, which promises Genmab as much as $3.15 billion in conditional payments, is part of AbbVie's long-running plan to grow its oncology business through dealmaking. Best known for its flagship drug Humira, AbbVie has had mixed results, finding the most success with profit-sharing collaborations.

It's been almost a decade since AbbVie spun out of Abbott Laboratories, and the pharma has spent much of that time searching for ways to reduce its reliance on Humira, which accounted for nearly 60% of its roughly $34 billion in revenue last year.

Diversifying its business was the rationale behind the $63 billion buyout of Allergan, a deal that gave AbbVie a lucrative aesthetics business centered on Botox as well as neurological drugs like the recently approved migraine treatment Ubrelvy.

AbbVie has also sought to build a leading cancer drug unit to accomplish the same goal, but its track record so far is checkered.

The company's best work has come through profit-sharing acquisitions, like the $21 billion deal for Pharmacyclics and its blood cancer drug Imbruvica. AbbVie co-markets the drug along with Johnson & Johnson. AbbVie also splits rights to Venclexta, its only other marketed cancer drug, with Roche.

Both Imbruvica and Venclexta are approved for various forms of leukemia and lymphoma, and generated $5.5 billion in revenue for AbbVie last year.

But other efforts, like a $5.8 billion buyout of Stemcentrx and an ill-fated alliance with Infinity Pharmaceuticals, have come up empty. Both resulted in clinical setbacks, as have internal efforts like a glioblastoma drug that failed in a 2019 study

AbbVie appears to hope it can recreate its success with Imbruvica and Venclexta through a broad partnership with Genmab, which developed the multiple myeloma antibody Darzalex, now owned by J&J.

Genmab, which raised almost $600 million in an initial public offering in the U.S. last year, also boasts collaborations with Novartis, Seattle Genetics, Novo Nordisk and several others.

AbbVie's success in working with J&J and Roche on Imbruvica and Venclexta played a major role in Genmab's decision to ally with the North Chicago, Illinois-based drugmaker, said Jan van de Winkel, Genmab's CEO, in an interview with BioPharma Dive.

Having inked 17 collaborations narrowly focused on specific drugs, van de Winkel was seeking a wider collaboration that would allow Genmab to retain partial ownership of drugs it discovered.

Talks with AbbVie began in June last year, as did conversations with a number of other companies. "For us, AbbVie checked all the boxes," van de Winkel said.

Some of the more than $1 billion in milestone payments AbbVie promised to Genmab are tied to three clinical-stage drugs. The most advanced, a bispecific antibody called epcoritamab, recently produced early data in two types of lymphoma, results which were presented virtually at the recent American Society of Clinical Oncology meeting.

While from a small study, the results are "very promising," wrote Cowen analyst Steve Scala, who compared them to Roche's mosunetuzumab, another bispecific antibody.

The two other clinical-stage drugs covered by the deal aren't yet supported by clinical data, making them "overlooked assets," according to RBC Capital Markets analyst Kennen MacKay.

The remaining $2 billion in milestone payments are tied to progress from up to four drugs that emerge from the research collaboration between AbbVie and Genmab. That work could include bispecific antibodies as well as another type of cancer drug that pairs an antibody with a tumor-killing toxin.

AbbVie and Genmab split rights to each of the three more advanced drugs, while AbbVie can opt in to own rights for drugs that emerge from the research alliance.

Author: Ben Fidler

Published:June 10, 2020

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