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Oncomed, Celgene in cancer deal

December 4, 2013 1:17 AM UTC

Oncomed Pharmaceuticals Inc. (NASDAQ:OMED) jumped $13.70 (98%) to $27.70 on Tuesday after granting Celgene Corp. (NASDAQ:CELG) exclusive options to jointly develop and commercialize up to six of Oncomed's cancer stem cell products, including demcizumab ( OMP-21M18). OncoMed will receive $155 million in cash up front. Celgene also will purchase about $22.3 million in OncoMed shares in a private placement, or about a 5% stake. OncoMed is eligible for up to $3.1 billion in option exercises and milestones for the six programs, including $790 million for demcizumab alone, plus royalties.

Celgene can exercise its option for demcizumab during or after completion of planned Phase II trials that will be conducted by OncoMed. If Celgene exercises the option, it will be responsible for two-thirds of global development costs, and the companies will co-commercialize demcizumab in the U.S. Celgene would have ex-U.S. commercialization rights, and OncoMed would be eligible for tiered double-digit royalties. The humanized IgG2 mAb against delta-like 4 (DLL4) is in Phase Ib testing, with a Phase II trial for first-line treatment of advanced pancreatic cancer slated to start next year. ...