Celgene to Acquire Quanticel for Up-to-$485M

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Celgene will acquire Quanticel Pharmaceuticals for up-to-$485 million—exercising an option to acquire the firm that was included in the $45 million cancer drug discovery collaboration the companies launched three and a half years ago.

It’s the second sizeable collaboration deal for Celgene in less than a week, coming three days after AstraZeneca and its MedImmune biologics R&D arm launched an up-to-$450 million-plus upfront, partnership. AstraZeneca has agreed to develop and commercialize MEDI4736—both alone and in combination with other AstraZeneca and Celgene cancer medicines, both potential and existing—across blood cancers that include non-Hodgkin’s lymphoma, myelodysplastic syndromes, and multiple myeloma.

Celgene’s latest deal is intended to bolster its cancer drug pipeline with Quanticel’s technology platform and its application toward new target discovery and generation of drug development programs. Those programs have resulted in “multiple” drug candidates from Quanticel that target specific epigenetic modifiers. The programs are expected to advance into clinical trials in early 2016, the companies said.

Privately-held Quanticel hasn’t shared too much else about the programs, though on its website the company has declared that it “will produce first-in-class small molecule cancer drug candidates by combining an experienced drug-hunting team with insights in tumor heterogeneity, cancer stem cell biology, and single cell bioengineering.”

Quanticel’s platform is designed for the single-cell genomic analysis of human cancer tumor biopsies, and draws upon the research of Quanticel’s academic founders Stephen Quake, Ph.D., the Lee Otterson professor of bioengineering and applied physics at Stanford School of Medicine and an investigator at the Howard Hughes Medical Institute; and Michael F. Clarke, M.D., associate director of the Stanford Institute for Stem Cell Biology and Regenerative Medicine, and the Karel H. and Avice N. Beekhuis professor in cancer biology.

Drs. Quake and Clarke founded Quanticel in 2010 with financing from Versant Ventures. A year later, Quanticel entered into its collaboration with Celgene. In return for committing the $45 million, Celgene took an equity stake in Quanticel, retained an exclusive option to acquire the company, and won the right to extend the collaboration in exchange for more funding.

In acquiring Quanticel, Celgene agreed to pay $100 million cash upfront, and up to $385 million in payments tied to research, development, and regulatory advances related to Quanticel’s platform. The deal is subject to customary closing conditions, including the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976.

Celgene said it anticipated the acquisition will be neutral to the company’s 2015 adjusted diluted earnings guidance. In January, Celgene projected adjusted diluted per-share earnings ranging from $4.60 to $4.75, up about 26% year-over-year based on the mid-point of the range. GAAP diluted EPS is expected to range from $3.68 to $3.92.

“More than acquiring the great team, the novel technology, and the drug candidates, the deal validates an innovative approach to building organizational capabilities,” Tom Daniel, M.D., Celgene’s president of research and early development, said in a statement. “This acquisition brings into Celgene a highly productive, innovative organization deploying a unique platform of high strategic value.”

Added Quanticel CEO Steve Kaldor, Ph.D.: Celgene made clear from the start that they valued both our technology and our team, and this resulted in an extremely collaborative and productive partnership over the past three years.”

Last October, Celgene expanded a nearly two-year-old collaboration with Sutro Biopharma to discover and develop multispecific antibodies and antibody-drug conjugates (ADCs).  That expansion doubled to more than $1 billion the maximum that Sutro stands to generate, with Celgene also holding an option to acquire the company.








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