Celgene bags a build-to-buy biotech in $485M cancer deal

Quanticel Research and Early Development President Tom Daniel

A few years after teaming up with Versant Ventures to get Stanford spinout Quanticel Pharmaceuticals off the ground, Celgene ($CELG) is buying the cancer-focused biotech for up to $485 million.

Quanticel has a drug-discovery engine that uses single-cell genomic analysis to decode tumors and spotlight their weak points. Based on the work of Stanford professors Stephen Quake and Michael Clarke, the company has spent the past 3 1/2 years refining its technology with a $45 million allowance from Celgene, and now the Big Biotech is buying in.

Under the deal, Celgene will hand over $100 million up front to acquire Quanticel, promising as much as $385 million down the road if the collaboration goes according to plan. Bringing Quanticel's discovery platform in house, Celgene expects to use the company's tumor-characterization tech to discover new therapies and accelerate the development of some pipeline candidates. Quanticel also has a stable of proprietary treatments, Celgene said, and the company plans to get some of those into the clinic next year.

The buyout marks yet another deal for Celgene's restless business development operation, following a $450 million oncology partnership with AstraZeneca ($AZN), a $1 billion handshake with Sutro Biopharma and an ongoing collaboration with Agios Pharmaceuticals ($AGIO).

Celgene's prolificacy reflects a top-down ethos of finding the most promising science in biotech and using its sizable checkbook to bring it in. And Quanticel, with its one-of-a-kind platform, fits that bill, Research and Early Development President Tom Daniel said.

"More than acquiring the great team, the novel technology, and the drug candidates, the deal validates an innovative approach to building organizational capabilities," Daniel said in a statement.

Quanticel is a graduate of the Versant build-to-buy academy, in which the VC firm partners with a larger drugmaker to seed a startup that may be acquired down the line. Versant has long been a pioneer among build-to-buy investors, striking deals with Roche ($RHHBY), Eli Lilly ($LLY) and others to launch startups born on the acquisition track. Its latest such project is Northern Biologics, a Toronto-headquartered cancer upstart launched with a Celgene partnership in tow.

- read the statement

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