The dealmakers at Celgene like to get really, really close to their biotech partners. And nothing demonstrates the sincerity of their interest in new technologies better than the acquisition of a nice big chunk of equity.
That strategy is paying off handsomely for Acceleron and a slate of its top venture backers now cashing out of a $47 million stake in the high-flying biotech. Celgene ($CELG) filed a form with the SEC saying it has increased its stake in the biotech to close to 15% after buying 1.1 million shares at a premium price from Flagship Ventures, Polaris Ventures, Venrock Associates, Advanced Technology Ventures and Alkermes ($ALKS). All that stock had been acquired before Acceleron ($XLRN) turned in a hot IPO last fall. And the news spurred a quick spike in Acceleron's stock price, leaving the biotech with a market cap of $1.15 billion.
Celgene paid close to triple the $15-a-share priced used for the IPO. High-flying stock prices have been a boon to biotechs and the venture groups which backed them. After being shut out of the market for years, investors' newfound appetite for risk propelled a wave of IPOs in the U.S. But in recent days the market on biotech stocks has faltered, triggering a considerable amount of fretting over the future of the biotech boom.
Long allied with Celgene, Cambridge, MA-based Acceleron--a 2010 Fierce 15 company--built its road show around three mid-stage programs: sotatercept, ACE-536 and dalantercept. The first two are allied with Celgene as new treatments designed to boost red blood cell production in patients suffering from rare cases of beta-thalassemia and myelodysplastic syndromes. ACE-536 won orphan drug status for both indications back in the spring of 2013. And dalantercept is designed to inhibit blood vessels that feed tumors.
Celgene initially signed on with Acceleron back in 2008, more recently expanding its collaboration to include 536. According to Acceleron's S-1, filed with the SEC, Celgene took over responsibility for all costs on the two programs at the beginning of this year and is committed to pay up to $567 million in milestones. Acceleron has copromotion rights in the U.S. with a hefty 20%-plus royalty stream due on any sales made by Celgene.
- here's the SEC document
Special Report: Acceleron Pharma - 2010 Fierce 15