Celgene Corp. will make an initial payment of about $1 billion,
including a stock purchase, as part of a 10-year collaboration with
fellow biotech company Juno Therapeutics Inc. on cancer and
autoimmune disease treatments.
In after-hours trading, shares of Juno were up 40% to
$64.98.
Upon closing, which is expected during the third quarter,
Celgene will pay Juno about $150 million and buy 9.1 million Juno
shares for $93 each. Celgene will have the right to buy additional
equity and the right to nominate a Juno board member.
The companies will initially focus on Chimeric Antigen Receptor
Technology and T cell Receptor technologies.
"This transaction strengthens Celgene's position in the emerging
and transformative area of immuno-oncology," Celgene Chief
Executive Bob Hugin said in a statement.
Under the agreement, Celgene has the option to be the
commercialization partner for Juno's oncology and cell therapy
autoimmune product candidates, including Juno's CD19 and CD22
directed CAR-T product candidates.
Celgene will also have the option to select two Juno programs
under which the companies would share world-wide expenses and
profits equally, except in China. Subject to additional
obligations, Celgene may select a third program.
Meanwhile, Juno will have the option to enter a co-development
and co-commercialization agreement on certain Celgene candidates
that target T cells. For Celgene-originated programs, 70% of costs
and profits would be allocated to Celgene.
In April, Celgene said its first-quarter earnings more than
doubled, reflecting strong sales for its blood-cancer drug
Revlimid.
Celgene's moves to enhance its pipeline include the purchase of
Quanticel Pharmaceuticals Inc. for an upfront payment of $100
million, a deal announced in April and slated to close in the
second half of the year. Also in April, Celgene entered a
collaboration agreement with AstraZeneca PLC.
On June 2, Juno said it acquired X-Body Inc., a transaction that
included an upfront payment of about $21 million in cash and
439,265 common shares. Juno said the deal added protein-engineering
capabilities that would improve its ability to generate drug
candidates.
Write to Josh Beckerman at josh.beckerman@wsj.com
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