Celgene has bought itself a spot toward the back of the pack in the PD-1 inhibitor market. The prolific dealmaker is paying $263 million upfront to get its mitts on the ex-Asia rights to Beigene’s PD-1 inhibitor BGB-A317 in solid tumors.
BGB-A317 has yet to enter global pivotal trials and has already given up a big head start to rival checkpoint inhibitors from Bristol-Myers Squibb, Merck and the rest of the PD-1/PD-L1 pack. But, while BGB-A317 may arrive too late to make a dent on the monotherapy market, it could still be a useful tool for Celgene as it puts together combinations of cancer drugs to hit solid tumors.
China’s Beigene is currently trialling BGB-A317 in solid tumors in combination with its experimental PARP inhibitor, BGB-290. And in Celgene it now has a partner with seven approved or clinical-phase solid tumor candidates to support further combinations.
Celgene, in keeping with its MO, has put up a significant sum of money and crafted a multifaceted deal to add BGB-A317 to its pipeline. In addition to paying the $263 million upfront, Celgene is committing to close to $1 billion in milestones and making a $150 million investment in Beigene. The price per share paid by Celgene is 35% higher than the stock’s 11-day average. Beigene’s share price shot up in the days before the Celgene deal was announced publicly.
In striking such a big-ticket deal, Beigene has added further luster to China’s burgeoning biotech scene.
The deal will also see assets transfer from Celgene to Beigene. Celgene is offloading its Chinese operations to Beigene and giving its new partner the rights to Abraxane, Revlimid and Vidaza in the country. That gives Beigene responsibility for making and selling the approved drugs—plus Celgene’s pipeline prospect CC-122—in China. When the deal closes in the third quarter, Beigene will instantly become a commercial-stage biotech.
Celgene is keeping a reduced footprint in China designed to support its clinical development and regulatory affairs activities in the country.
While the asset transfer is significant, particularly for Beigene, BGB-A317 is the meat of the deal for Celgene. Assuming the pivotal trial goes well, the asset will free Celgene from the need to rely on other companies for checkpoint inhibitors to use in its solid tumor combinations. The question is whether those combinations will come soon enough and be good enough to shunt aside the immuno-oncology incumbents and their innumerable experimental drug cocktails.