BOTHELL, Wash.--(BUSINESS WIRE)--Seagen Inc. (Nasdaq: SGEN) today announced the closing of a $1.0 billion equity investment by Merck in 5.0 million newly-issued shares of Seagen common stock at a price of $200 per share. The closing occurred following expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (HSR Act). The investment was made in connection with a global collaboration with Merck to co-develop and commercialize ladiratuzumab vedotin, an investigational antibody-drug conjugate (ADC) targeting LIV-1, which is currently in clinical trials for breast cancer and other solid tumors.
“This investment by Merck further strengthens our balance sheet, and provides us with considerable financial resources to continue building Seagen as a global, multi-product oncology company,” said Clay Siegall, Ph.D., President and Chief Executive Officer of Seagen. “We are investing in broad clinical development of our approved products, advancing our late-stage programs and conducting R&D to ensure a robust early-stage pipeline of innovative therapies for the treatment of cancer.”
The financial impact of the collaboration, including the stock purchase agreement, will be discussed during Seagen’s third quarter financial results conference call on October 29, 2020.
Ladiratuzumab Vedotin Collaboration Details
Under the terms of the agreement, Seagen and Merck will collaborate and equally share costs on the global development of ladiratuzumab vedotin and other LIV-1-targeting ADCs. The companies have agreed to jointly develop and share future costs and profits for ladiratuzumab vedotin on a 50:50 basis worldwide. Merck paid Seagen $600 million upfront and made a $1.0 billion equity investment in 5.0 million shares of Seagen common stock at a price of $200 per share in connection with entry into the agreement. In addition, Seagen will be eligible to receive up to $2.6 billion in milestone payments, including $850 million in development milestones and $1.75 billion in sales milestones.
The companies will jointly develop and commercialize ladiratuzumab vedotin and equally share profits worldwide. The companies will co-commercialize in the U.S. and Europe. Seagen will be responsible for marketing applications for approval in the U.S. and Canada, and will record sales in the U.S., Canada and Europe. Merck will be responsible for marketing applications for approval in countries outside the U.S. and Canada, and for sales efforts in countries outside the U.S., Europe and Canada. Including the upfront payment, equity investment proceeds and potential milestone payments, Seagen is eligible to receive up to $4.2 billion.
About Ladiratuzumab Vedotin
Ladiratuzumab vedotin is a novel investigational ADC targeted to LIV-1. Most metastatic breast cancers express LIV-1, which also has been detected in several other cancers, including lung, head and neck, esophageal and gastric. Ladiratuzumab vedotin utilizes Seagen’s proprietary ADC technology and consists of a LIV-1-targeted monoclonal antibody linked to a potent microtubule-disrupting agent, monomethyl auristatin E (MMAE) by a protease-cleavable linker. This novel ADC is designed to bind to LIV-1 on cancer cells and release the cell-killing agent into target cells upon internalization. Ladiratuzumab vedotin may also cause antitumor activity through other mechanisms, including activation of an immune response by induction of immunogenic cell death.
About Seagen
Seagen Inc. is a global biotechnology company that discovers, develops and commercializes transformative cancer medicines to make a meaningful difference in people’s lives. Our U.S. headquarters are in the Seattle, Washington area, with locations in California, Canada, Switzerland and the European Union. For more information on our marketed products and robust pipeline, visit www.seagen.com and follow @Seagen on Twitter.
Forward Looking Statements
Certain of the statements made in this press release are forward looking, such as those, among others, relating to Seagen’s potential receipt of milestone payments, including development- and sales-based milestone payments, under the ladiratuzumab vedotin collaboration with Merck (the Collaboration Agreement); anticipated activities of the parties under the Collaboration Agreement; Seagen’s expectation of investing in clinical trials aimed at maximizing the potential of its commercial products, expanding globally and advancing its deep pipeline of innovative therapies for the treatment of cancer; and any other statements that are not historical fact. Actual results or developments may differ materially from those projected or implied in these forward-looking statements. Factors that may cause such a difference include, without limitation, risks and uncertainties related to: Seagen’s ability to maintain the Collaboration Agreement, including the risk that if Merck were to breach or terminate the Collaboration Agreement, Seagen would not obtain all of the anticipated financial and other benefits of the Collaboration Agreement, and the development and/or commercialization of ladiratuzumab vedotin could be delayed, perhaps substantially; delays, setbacks or failures in clinical development activities for a variety of reasons, including the difficulty and uncertainty of pharmaceutical product development, the risk of adverse events or safety signals, the inability to show sufficient activity in current and future clinical trials and the possibility of adverse regulatory actions; the risk that the parties may not be successful in their joint development efforts under the Collaboration Agreement and that, even if successful, the parties may be unable to successfully launch and commercialize ladiratuzumab vedotin; and the duration and severity of the COVID-19 pandemic and resulting global economic, financial, and healthcare system disruptions. More information about the risks and uncertainties faced by Seagen is contained under the caption “Risk Factors” included in Seagen’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2020 filed with the Securities and Exchange Commission. Seagen disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
