Celgene dips out of deals ahead of mega-merger


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Dive Brief:

  • Celgene has agreed to pay $150 million to exit a two-year-old deal with BeiGene focused on developing and commercializing one of the Chinese biotech’s immuno-oncology drugs.
  • As a result, BeiGene regains full global rights to tislelizumab, an anti-PD1 agent under investigation across more than half a dozen cancers, including lung, liver and blood. BeiGene has filed the drug for approval in China for both relapsed/refractory classical Hodgkin lymphoma and locally advanced or metastatic urothelial carcinoma, and expects the first approval decision later this year.
  • Celgene has been a frequent partner to smaller biotechs, but Wall Street analysts said that may change if Bristol-Myers Squibb’s planned acquisition of the company goes through. In the last week, BeiGene and Mereo BioPharma each announced fizzled partnerships with Celgene.

Dive Insight:

The mega-merger between Bristol-Myers and Celgene may affect dozens of biotechs that partner with the companies. But even early on, BeiGene’s deal looked particularly vulnerable to change because it centered around immuno-oncology — an area Bristol-Myers has well-covered with its blockbuster PD-1 drug Opdivo (nivolumab).

Right after Celgene announced its takeover in early January, BeiGene shares fell more than 15%.

«We believe investor uncertainty regarding the ultimate disposition of tislelizumab, including potential extent and duration of research funding as a key overhang,» Andrew Berens, an analyst at SVB Leerink, wrote about BeiGene in a Jan. 3 note to clients.

BeiGene executives, meanwhile, maintain a more positive outlook. They noted earlier this year that the company already finances and runs most of the pivotal studies for tislelizumab. And in a June 17 statement, CEO John Oyler said BeiGene is «well-positioned» to further advance the drug.

Celgene in mid-2017 secured rights to develop tislelizumab in solid tumors for all markets outside Asia, with Japan being an exception. In exchange, the Chinese biotech received $263 million upfront and an exclusive license to commercialize Celgene’s cancer drugs Revlimid (lenalidomide), Abraxane ​(paclitaxe) and Vidaza (azacitidine) in China. Celgene also took a 5.9% equity stake in BeiGene, valued then at $150 million.

While Celgene is backing away from tislelizumab, BeiGene said it will hold onto the commercial license to Celgene cancer drugs in China.

Mereo BioPharma is also getting rights back from Celgene.

Last week, the London-based company said Celgene chose not to exercise an option to license etigilimab, an antibody that inhibits certain T cell immunoreceptors. According to Mereo, which got etigilimab through the recent acquisition of OncoMed, research suggests these immunoreceptors prevent T cells from attacking tumor cells.

The deal between Mereo and OncoMed carried contingent value rights (CVRs) based on etigilimab achieving certain milestones. But because of Celgene’s decision not to opt in on the drug, Mereo doesn’t expect CVR holders will receive associated milestone payments.




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