Catalent inks a $619M deal to help Roche develop targeted therapies

Catalent's Mike Riley

Catalent Pharma Solutions ($CTLT) is loaning out one of its drug development platforms to Roche ($RHHBY) in a heavily back-loaded deal, signing on to reap as much as $619 million.

Under the deal, Roche is paying $1 million up front for the use of Catalent's so-called SMARTag technology, which allows scientists to craft proteins that home in on specific biological targets. The idea is to affix therapeutic payloads to these proteins, creating targeted treatments that attack specific sites while sparing healthy tissues.

In the initial phase of the collaboration, Roche will investigate SMARTag's potential against an undisclosed number of targets, and the Swiss drugmaker has the right to license any resulting drug candidates. Catalent is due up to $618 million more if its partner pulls the trigger on all of its options, plus royalties on net sales of any approved products.

"Our goal is to combine our differentiated SMARTag technology with Roche's expertise to create new transformational treatments," Catalent Biologics Vice President Mike Riley said in a statement.

Catalent picked up SMARTag in its 2014 buyout of longtime partner Redwood Bioscience, the company's first acquisition after going public in a roughly $870 million IPO the same year.

A major pillar of SMARTag's value lies in its potential as part of an antibody-drug conjugate (ADC), a class of cancer-fighting therapeutics that fuse an antibody to a tumor-killing chemical to create a targeted treatment. Sanofi ($SNY) partnered up with Catalent last year with eyes on tapping SMARTag for ADC development.

- read the statement