Restless Seattle Genetics snaps up a pivotal-stage cancer drug with $614M Cascadian buyout pact
After getting snubbed last year on a major collaboration with Immunomedics, Seattle Genetics $SGEN CEO Clay Siegall has bounced back with a $614 million deal to acquire crosstown biotech Cascadian Therapeutics $CASC, now in a pivotal Phase II with a new breast cancer therapy.
Cascadian stock, which closed yesterday at $5.90, immediately soared 68% for $9.90 in pre-market trading.
You may remember this company better under its old name, Oncothyreon, after it executed a series of painful missteps — Stimuvax, for example, one of several cancer vaccine duds — that made a new name and a new CEO in Scott Myers logical.
Under Myers, the biotech has been making fast progress with tucatinib — formerly known as ONT-380 in the pre-makeover days. It’s a HER2 inhibitor that has been matched up with Herceptin and Xeloda in combatting treatment-resistant breast cancer. The pill is intended to get through the blood-brain barrier to help some desperately ill patients.
In a Phase Ib trial, the triplet scored a median progression-free survival rate of 7.8 months, an overall response rate of 61% and a median duration of response of 10 months.
With that data in hand, Myers went back to the FDA and got them to agree to let Cascadian increase enrollment in the mid-stage study to 480 and make it a registrational trial in the process. The trial got underway in the US and Canada, then started adding sites in Europe, Australia and Israel.
Now Siegall is stepping in to scoop it up, bagging one of the few other biotechs to be based in Seattle. And he has plans for the Cascadian program that extend far past the first indication.
Tucatinib would complement our existing pipeline of targeted cancer therapies, provide a third late-stage opportunity for a commercial product in solid tumors and expand our global efforts in breast cancer. It also leverages our broad expertise and resources to advance and expand the tucatinib program for patients. Beyond breast cancer, we believe there may be opportunities for tucatinib in other tumor types, such as HER2-positive metastatic colorectal cancer. Cascadian’s pipeline also includes a preclinical immuno-oncology agent. We look forward to welcoming the team at Cascadian Therapeutics and continuing the momentum of the tucatinib development program.
Right on the heels of the announcement Seattle Genetics said it would push through a $550 million offering to help pay for the deal. And Cascadian acknowledges in an SEC filing that in the event the deal falls though for certain reasons, it will have to hand over $17 million to Seattle Genetics.
Siegall has had plenty of ups and downs over the past year at Seattle Genetics, which has been steadily pushing its way to blockbuster status for its franchise drug Adcetris, adding new indications along the way. Their $2 billion deal on Immunomedics fell apart last spring, leaving Siegall restlessly looking for new ways to expand the pipeline.
It won’t go unnoticed that this is the latest in a string of M&A deals in the biotech sector. Now that tax reform is out of the way, Big Pharma has been stepping up, with Sanofi announcing two deals and Celgene buying Juno. This new acquisition underscores an appetite for assets that is likely to drive additional deals in 2018 after a lengthy drought.