GSK has the option to four compounds directed at multiple targets.

OncoMed Pharmaceuticals stands to make over $1.4 billion in a deal with GlaxoSmithKline (GSK). The partnership aims to discover, develop, and market OncoMed’s antibody therapeutics that target cancer stem cells.

OncoMed will receive an undisclosed initial payment composed of cash and an equity investment. In addition, GSK agreed to pay $1.4 billion in milestone fees.

GSK has the option to license four product candidates directed at multiple cancer stem cell targets. OncoMed will receive double-digit royalties on all collaboration product sales. Furthermore, GSK will have an option to invest in a future IPO by OncoMed.

The alliance includes OncoMed’s lead candidate, OMP- 21M18, a mAb scheduled to enter the clinic in 2008. OncoMed will develop the most promising mAbs, including OMP-21M18, through clinical proof of concept across multiple indications.

GSK will then have an exclusive option to license these antibodies. GSK would assume responsibility for funding of further clinical development and commercialization on a worldwide basis. OncoMed retains the option to participate in development and commercialisation of OMP-21M18 on pre-agreed terms.

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