Celgene wraps $500M deal to partner with Sutro on next-gen ADCs

Antibody-drug conjugates are hot. Next-gen ADCs are even hotter. So Celgene ($CELG) has turned to the upstart ADC developers at Sutro Biopharma, promising a package of more than $500 million in upfront fees, an equity stake, R&D support and milestones in exchange for some fine-tuned products. And the biotech says that it is hot on the trail of more deals.

There was no breakdown on the cash commitment, but Sutro characterized the upfront as "substantial," with the collaboration targeting new ADCs and bi-specific antibodies for two undisclosed targets using the biotech's cell-free protein synthesis approach. The classic biotech discovery deal, though, is generally heavily back-ended with milestones.

This field has been dominated to a large extent by Seattle Genetics ($SGEN) and ImmunoGen ($IMGN), which have developed some high-profile ADCs that turned the technology into a must-have pipeline feature. That R&D trend has been a big plus for Sutro, which promises to shave a year or more off the development cycle with a new approach it says will deliver a much better weapon against disease.  

The first generation of ADCs, CEO Bill Newell tells FierceBiotech in an e-mail, is made up of "structurally heterogeneous populations--mixtures--in which the position and number of conjugated linkers and warheads vary significantly. Such heterogeneity prevents the definition of structure-activity relationships (SARs). Consequently, using traditional ADC technologies prevents researchers from discovering and developing single-species candidates with optimal therapeutic indices and can result in products with unpredictable and sub-optimal pharmacokinetic properties, stability and efficacy."

"Sutro," he adds, "can incorporate non-natural amino acids (nnAA) at any site in an antibody structure, thereby allowing for single-species ADCs with site-specific conjugation of linker and warhead. Of vital importance in this process is Sutro's ability to perform rapid analyses early in discovery to define SARs and locate the best positions for nnAA incorporation." And because the company can rapidly gin up a quantity of proteins for early tox tests and clinical studies, developers can compress development time.

Sutro--which garnered $36.5 million in venture cash for its third round--has attracted the attention of some heavyweight drug developers with its approach. Pfizer ($PFE) signed on last year and the company says that more deals are in the works.

"Sutro is in active discussions with numerous partners, and we anticipate announcing 1-2 additional collaborations in the next 12 months," notes Jeremy Bender, chief business officer.

- here's the press release

Special Report: Celgene - The Biggest R&D Spenders in Biotech

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