The latest teaser in the biotechnology sector: Irish biotech company Jazz Pharmaceuticals (NASDAQ:$JAZZ) has signed a deal with ImmunoGen Inc. (NASDAQ:$IMGN) in the development of drugs in the Massachusetts-based company pipelines. This sent shares soaring Tuesday, with an additional climb of 11.7% in ImmunoGen shares during Wednesday’s trading session.
Last fall, ImmunoGen announced a “restructuring” to cut its workforce to seek out new partners in bringing back key drug candidates to market. Jazz Pharmaceuticals will fill that role for three of ImmunoGen’s hematology drugs.
What’s the price? Jazz Pharmaceuticals is handing over a check for a cool $75 million to ImmunoGen, in addition to a $100 million in funding over the next 7 years. In return, Jazz Pharmaceuticals is granted the right to ImmunoGen’s IMGN779, and a CD33-targed ADC for actue myeloid leukemia (in phase 1 studies).
The Fine Print
Jazz Pharmaceuticals is granted participation into these drugs until either the start of a pivotal study or prior to an FDA filing for approval. If Jazz decides to opt in before a pivotal trial begins, it will pay an exercise fee in the range of mid-double-digit millions of dollars. On the other hand, if it chooses the latter option, the company will pay low-triple-digit millions.
In the ideal scenario where the drug is approved, ImmunoGen will receive additional impressive payments, on top of royalties on sales in percentages that could go all the way up to the low 20s.
This agreement is great for ImmunoGen; not only will it bolster the company’s balance sheet, but it’ll also provide financial freedom to develop their core drugs, such as mirvetexuimab soravtansine.
Featured Image: twitter
