Celgene bets $30M on a Versant-backed cancer startup

Northern Biologics CEO Stefan Larson

Striking its fourth oncology deal in under a week, the prolific Celgene ($CELG) is teaming up with a graduate of the Versant Ventures startup academy, betting the biotech's proprietary R&D engine can churn out some valuable cancer candidates.

In an agreement with Toronto's Northern Biologics, Celgene is handing over $30 million up front to support the company's efforts to craft first-in-class antibody treatments, focusing on oncology and fibrosis. Northern Biologics will handle discovery and early development, and Celgene will have the option both to in-license any resulting treatments and to buy the company outright for an undisclosed sum.

Versant unveiled Northern Biologics last year, investing $10 million in Series A funding to help the nascent company grow out of a Canadian incubator called Blueline Bioscience. And Celgene has been in the biotech's orbit since its inception, intrigued by the company's approach to antibody development.

"Celgene's financial and scientific contributions will enable us to rapidly progress our therapeutic antibodies to the clinic," Northern Biologics CEO Stefan Larson said in a statement.

For Celgene, whose pipeline has been jokingly compared to an oncology index all its own, the deal fits well with the Big Biotech's top-down ethos of finding the most promising science in biotech and using its sizable checkbook to bring it in. Over the past few days alone, Celgene has traded $450 million for a share of AstraZeneca's ($AZN) PD-L1 therapy, acquired the Versant-seeded oncology biotech Quanticel Pharmaceuticals and extended its collaboration with Agios Pharmaceuticals ($AGIO)--a company in Northern Biologics' position not too long ago.

And Northern Biologics, like Quanticel, is a product of Versant's penchant for build-to-buy startups, in which the 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.

- read the announcement (PDF)

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