GSK sign world's-biggest licensing deal with Genmab

By Dr Matt Wilkinson

- Last updated on GMT

Related tags Gsk Immune system

GlaxoSmithKline (GSK) has broken an industry record by licensing a
drug for leukaemia from Genmab for $2.1bn (€1.6bn).

The deal gives GSK the co-development and commercialisation rights to the human monoclonal antibody, HuMax-CD20 (ofatumumab). The antibody is in Phase III development for CD20 positive B-cell chronic lymphocytic leukemia and follicular non-Hodgkin's lymphoma, as well as in Phase II trials for rheumatoid arthritis.

Genmab will receive an initial license fee of $102m with GSK investing $357m to purchase a 10.1 per cent share of the company, which is valued at $2.7bn even though it is yet to make a profit.

The deal overtakes the $2bn deal signed by Bristol-Myers Squibb with ImClone for their Erbitux (cetuximab) drug as the world's largest licensing agreement. It includes milestone payments to Genmab of up to $1.6bn based on the drug's successful development and commericalisation in the cancer, autoimmune and inflammatory disease markets. Genmab will also be entitled to receive tiered double-digit percentage royalties on global sales.

Sales of the drug have been estimated to be anywhere between $2bn and $5bn a year with Jyske Bank analyst Frank Andersen, forecasting peak turnover of $2.8 billion. GSK expects to file for US Food and Drug Administration (FDA) approval in 2008.

Spending spree

The deal continues GSK's push into the antibody market after its acquisition of ultra-small antibody manufacturer, Domantis for £230m (€340m) two weeks ago. It has been spending freely on its pipeline of late, entering into another licensing agreement with EPIX Pharmaceuticals to develop G-protein coupled receptor (GPCR) targeted drugs for Alzheimer's disease in a deal that could be worth up to $1.2bn.

And in April, GSK licensed RNA interference (RNAi)-based therapeutics for respiratory diseases in a deal worth over $700m from Sirna, although Merck subsequently purchased Sirna for $1.1bn in October.

According to a Datamonitor report on licensing strategies in pharma, the top 20 pharmaceutical companies are becoming increasingly dependent on in-licensed products, with an average of 19.5 per cent of their total ethical sales being derived from these in 2004.

GSK spent around $6.1bn on in-house research and development in 2005, approximately 14 per cent of total revenues.

Talking to a spokesperson for GSK said: "GSK has significant internal investment in R&D - our approach isn't to acquire everything out there, we're looking for alliances that can be beneficial to both parties while creating breakthrough medicines."

"The amount paid for the license is a comparable figure to others we have signed this year, although it is difficult to compare deals."

The HuMax-CD20 antibody has a similar mode of action as Genentech's Rituxan (rituximab). The antibodies bind to the CD20 antigen on the surface of white blood cells, B-cells, which normally have a positive role to play in the immune system. However, certain lymphomas and leukaemias arise from the same sources as white blood cells and frequently have CD20 antigens on the surface.

The body's natural immune system is directed to attack the cells to which the antibody is bound, which are often implicated in various cancers, autoimmune and inflammatory diseases. Stem cells and plasma cells do not carry the CD20 antigen and are therefore spared to continue their vital roles in regeneration and antibody production, respectively.

GSK signed the contract despite the recent disclosure by the FDA that two patients had died suffering from a viral infection of the central nervous system after taking Rituxan. The FDA stressed that the patients had been treated with other drugs that also affect the immune system and that they were taking the drug for an off-label indication.

Commenting on the deal, Dr. Moncef Slaoui, GSK chairman of R&D said: "We believe that this alliance is a significant step for GSK and Genmab. By combining the skills and knowledge of Genmab in developing fully human antibodies, such as HuMax-CD20, and the substantial experience of GSK in clinical and commercial development, we hope to be able to bring this innovative and potentially valuable medicine to patients as soon as possible."

Antiviral dropped

Meanwhile, GSK has discontinued the development of brecanavir, its investigational protease inhibitor for the treatment of HIV, which was in Phase II clinical development. The drug was dropped due to what GSK described as "insurmountable issues" regarding formulation and development.

Commenting on the failure, Lynn Marks, senior vice president, GSK Medicine Development Centre for Infectious Diseases, said: "Despite this disappointing outcome with brecanavir, we remain unwavering in our commitment to find new solutions to meet the challenges of HIV/AIDS."

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