Seattle Genetics CEO Clay Siegall. (Seattle Genetics Photo)
Shares of Seattle Genetics are soaring more than 10% this morning after the Bothell, Wash.-based biotechnology company struck a deal with Merck in which the pharmaceutical powerhouse will provide a $600 million upfront payment and make a $1 billion equity investment to continue development of treatments for breast cancer.
Merck is purchasing 5 million shares of Seattle Genetics at $200 per share as part of the deal, which focuses on Seattle Genetics’ experimental LIV-1 product, currently in Phase 2 clinical trials. As part of the deal, Seattle Genetics could receive $2.6 billion if development milestones are met, and another $1.75 billion if sales milestones are reached.
The companies also said they plan to share the costs of developing LIV-1, with a 50-50 split on future costs and profits. Merck will also integrate the Seattle Genetics R&D efforts with its own Keytruda breast cancer treatment program, part of an ongoing collaboration between the two companies.
Fierce Biotech reports that the Merck usually doesn’t make large bets of this kind on biotechnology products. The news site notes that the deal with Seattle Genetics comes within hours of Gilead Sciences agreeing to buy Immunomedics for $21 …read more