China, Deals

Celgene joins the PD-1 checkpoint club, bagging BeiGene drug with $413M down and $1B on the table

Celgene is joining the fast growing PD-1 club.

John Oyler, BeiGene

The big biotech $CELG has taken a lead position in the second wave of PD-1 checkpoints in the clinic, bagging rights to BeiGene’s $BGNE candidate for solid tumors in a $1.4 billion deal, with $263 million of that paid upfront in a licensing fee, $150 million for an equity stake and $980 million more in milestones.

It’s a rich deal for this stage of the game, aimed at the richest healthcare markets on the planet. Celgene gets the US and European markets and everything else outside of Asia, which the Chinese company is keeping for itself, along with global development rights on hematological malignancies. Two years ago, Celgene paid AstraZeneca $450 million up front to partner on their PD-L1 for heme.

The move was announced the same day as Merck’s combination studies matching its PD-1 drug Keytruda with Celgene’s Revlimid and Pomalyst were put on hold by the FDA — a month after investigators flagged a higher rate of death in the checkpoint arm. This was one of the rare instances where a checkpoint was linked to a potentially lethal safety issue. So far, their ability to spur an immune system attack on cancer cells has been carving out billions in new revenue, with hundreds of combination studies underway to match the immuno-oncology approach with targeted therapies.

BeiGene, which is in late-stage studies in China, is also getting Celgene’s commercial operations in the massive Asian market, with exclusive rights to commercialize Revlimid, Abraxane and Vidaza. BeiGene also gets rights to Celgene’s C-122, a next-gen CelMOD currently in development for lymphoma and hepatocellular carcinoma. And BeiGene is committed to beefing up its manufacturing operations to support the partnership in Asia.

The PD-(L)1 crew already has 5 therapies on the US market. Merck and Bristol-Myers Squibb led the way, followed by Roche, Pfizer/Merck KGaA and AstraZeneca. But they keep coming. Celgene’s checkpoint will start a pivotal global program next year, making it a distinctly late entry in the field.

While the basic biology of the PD-1 drugs is well understood at this point, making the clinical risk relatively modest, there have still been plenty of surprises as new programs push ahead. Bristol-Myers found that out with its misstep in lung cancer, which has cost the company dearly. There are some big debates going on now on whether PD-1 is inherently more potent than PD-L1 in dismantling a cancer cell’s stealth mechanism. That discussion was sharpened after Roche’s PD-L1 Tecentriq failed a crucial late-stage study, but it’s nowhere close to being resolved.

For its part, BeiGene says that its PD-1 just might be better than the rest, pointing to some added engineering in the Fc region of the antibody. And China once again benefits from news that points to the booming country as a hot spot in drug development.

Celgene is bringing in the PD-1 as the company continues one of the most ambitious pipeline campaigns in the industry, beefing up its R&D group with a deal spree that has now continued for years. For BeiGene, Celgene’s quest is their opportunity to partner up with one of the most aggressive biotechs in the business.

“This strategic partnership with Celgene is a transformational event for BeiGene, transitioning us into a commercial-stage company and preparing us well for the future potential launch of our internally developed compounds, some of which are already in pivotal trials in China,” said John Oyler, CEO and co-founder of BeiGene.


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RAPS Regulatory Convergence 2017