UCB has terminated its nearly 10-year-old collaboration with Immunomedics to develop and commercialize the latter’s lead candidate epratuzumab for all non-cancer indications worldwide. No reason for the termination was disclosed by Immunomedics in its announcement today of the end of the companies’ licensing agreement. “The companies will now begin the transition process in a timely and orderly fashion,” Immunomedics said in its statement.

The termination follows the disclosure in July that epratuzumab failed two Phase III trials—known as EMBODY 1 and EMBODY 2—in systemic lupus erythematosus (SLE). The candidate missed its primary endpoints in both 48-week trials, during which a combined 1,574 patients received placebo or treatment with 2,400 mg of epratuzumab over four 12-week treatment cycles, administered as 600 mg every week for four weeks or 1,200 mg every two weeks for four weeks.

At present, according to Immunomedics, epratuzumab is being studied in a Phase III trial, sponsored by a European consortium, in pediatric patients with acute lymphoblastic leukemia. Bayer, meanwhile, has begun studying epratuzumab as a thorium-227-labeled antibody in patients with advanced non-Hodgkin lymphoma.

“The return of the worldwide rights of epratuzumab for all non-cancer indications allows us to examine all options to maximize its value, not only in oncology but also in autoimmune diseases,” Immunomedics President and CEO Cynthia L. Sullivan said in a statement.

Epratuzumab is a monoclonal antibody designed to target CD22, a protein that modulates B cells. While epratuzumab's mechanism of action has not been not fully elucidated, UCB and Immunomedics have cited data indicating that the compound binds to CD22, resulting in diminished SLE-related hyperactivity of B cells without depleting them.

In May 2006, UCB agreed to license epratuzumab from Immunomedics, gaining exclusive worldwide rights to develop, market, and sell epratuzumab for all autoimmune disease indications.

In return, UCB agreed to pay Immunomedics $38 million up front, with up to $145 million in payments tied to achieving unspecified milestones and $20 million in equity investments, depending on where the compound was approved and in which indications, over “several” years. UCB also agreed to pay royalties on sales, plus sales bonuses tied to reaching undisclosed sales targets.

In December 2011, the companies restructured their development collaboration and license agreement by allowing UCB to select a partner to sublicense its rights for certain territories in return for the company returning its buy-in right for the cancer indication to Immunomedics.

Under the amended collaboration, UCB agreed to pay Immunomedics $30 million up front; an additional $30 million if UCB exercised its right to sublicense, plus additional unspecified payments tied to achieving regulatory and sales milestones.

In return, Immunomedics agreed to issue to UCB a five-year warrant to purchase one million shares of Immunomedics' common stock at an exercise price equal to $8 per share.