Genzyme revenues may rise $185 million.
Bayer has inked a deal with Genzyme to commercialize alemtuzumab, a multiple sclerosis treatment, as well as commercializing its hematologic oncology portfolio, in a deal that could be worth close to $2 billion over the next 10 years for the German pharmaceutical. The deal includes no up-front payments. Instead, both companies will share revenue in an earn-out agreement, with Genzyme expected to earn $185 million in oncology revenue this year, and up to $700 million over the next three years.
Bayer may earn up to $1.25 billion until 2021 on the multiple sclerosis treatment, and up to $650 million for the suite of oncology drugs.
“Alemtuzumab is a potentially transformative therapy for the treatment of multiple sclerosis, and an important part of our future. This strategic transaction clarifies the responsibilities of each company and gives Genzyme control over the execution of this program,” says Henri A. Termeer, chairman and CEO of Genzyme. “We will continue to collaborate with Bayer in a more streamlined and focused way.”
The company is conducting two Phase III studies of alemtuzumab, with the first trial treating patients with no prior therapies, and the second treating those who have relapsed on other medications.
Bayer will continue to fund development of the drug until it is approved for a multiple sclerosis indication, with Genzyme to take the primary role in commercialization.
For the oncology suite, Bayer will supply Fludara and Leukine until Genzyme’s plant acquisition is completed, with the German pharmaceutical receiving payments based on annual revenue, capped at $500 million over eight years.
Genzyme will acquire a new Seattle-based facility to manufacture Leukine for $75 million to $100 million and hire the plant personnel following FDA plant approval, expected next year.
The transition, expected to last several months, follows Genzyme’s acquisition of alemtuzumab from Ilex Oncology in 2004. The company had received two-thirds of the therapy’s net U.S. profits and a substantial royalty from Bayer’s foreign sales prior to the new agreement.