Immunomedics has entered into an exclusive global licensing agreement with Seattle Genetics, an innovative global biotechnology company that develops and commercializes novel antibody-drug conjugates (ADCs) for the treatment of cancer. Under the agreement, Seattle Genetics will develop, fund, manufacture and commercialize IMMU-132, Immunomedics' proprietary solid tumor therapy candidate.

The agreement also provides that Seattle Genetics will be responsible for initiating the phase III clinical trial of IMMU-132 in patients with metastatic triple-negative breast cancer (TNBC) and submitting the initial Biologics License Application (BLA) to the FDA for accelerated approval. The agreement includes the development of additional indications for IMMU-132, including urothelial cancer (UC), small cell lung cancer (SCLC) and non-small cell lung cancer (NSCLC), which are currently in phase II clinical studies, along with other solid tumor indications being studied in ongoing clinical trials.

Cynthia L. Sullivan, president and chief executive officer of Immunomedics, said, "We are pleased to enter into this exclusive worldwide licensing agreement with Seattle Genetics to further advance IMMU-132 on behalf of patients with late-stage cancers, who have limited therapeutic options, while delivering significant and compelling near- and long-term value to stockholders. Since its founding, Immunomedics has been dedicated to creating and advancing novel therapies in challenging diseases with unmet therapeutic needs. Seattle Genetics' reputation, development portfolio and track record make them an ideal partner to advance IMMU-132.

“Additionally, this agreement validates the dedication and effort by our entire internal teams in research and development, manufacturing, clinical, regulatory and general administration. In just over three years, we have brought IMMU-132 through clinical developments in multiple indications, and have advanced the TNBC indication to a potential accelerated approval and launch by late 2017 or early 2018, which could make IMMU-132 available to patients dealing with a highly malignant form of breast cancer. We are proud to have achieved this critical milestone and thank our entire team for their hard work. Immunomedics looks forward to appropriately supporting Seattle Genetics as it seeks to bring IMMU-132 to commercialization."

Clay Siegall, Ph.D., president and chief executive officer of Seattle Genetics, said, "As the global leader in ADCs, we are excited to enter into this licensing agreement with Immunomedics for sacituzumab govitecan. This program would complement our rich pipeline of late- and early-stage programs, potentially allowing us to bring a new therapy for triple-negative breast cancer to patients in need. We have successfully demonstrated our expertise in the development, manufacturing and commercialization of ADCs in oncology, and we look forward to working with Immunomedics to advance this program."

Dr. David M. Goldenberg, chairman and chief scientific officer of Immunomedics, commented, "After extensive preclinical research conducted by our scientists, and about three years of clinical development by our clinicians and our collaborating external investigators studying over 400 patients, we have decided that this is the right time to out-license IMMU-132. Although we have had partnerships in the past, I am extremely enthusiastic about entering into this collaboration with Seattle Genetics, a company that has achieved a leadership role in antibody-drug conjugates. Both companies are committed to bringing important products to cancer patients. This common goal is sincere and will be the basis of making IMMU-132 fulfill its full potential."

Dr. Goldenberg further remarked, "After a long period of interactions with many interested partnering candidates, and a considerable period of discussion with Seattle Genetics, we concluded that working with this group of successful business and marketing executives, clinicians and scientists would allow us to contribute our own scientific and clinical knowledge to them as they further develop IMMU-132 and bring it to commercialization. We are particularly pleased with their enthusiasm, and that this arrangement allows us to continue our ongoing phase II studies in a number of additional cancer types while we transition this product candidate to them."

The agreement provides for potential payments of approximately $2 billion across multiple indications, plus double-digit tiered royalties on global net sales. Under the terms of the agreement, Immunomedics will receive $250 million in upfront cash payment, plus, among other milestone payments, an additional $50 million (or negotiated economic splits) relating to rights outside the U.S., Canada and the EU. The remainder of the consideration comprises approximately $1.7 billion that is contingent upon achieving certain clinical, development, regulatory and sales milestones, including an anticipated near-term milestone for acceptance of the Biologics License Application (BLA) by the FDA for TNBC, additional milestones based on regulatory approval of IMMU-132 for TNBC in the U.S. and other territories, and future development and regulatory milestones for additional indications beyond TNBC. Future royalty payments are tiered double-digit royalties based on global net sales. In addition, Immunomedics will retain the right to elect to co-promote IMMU-132 in the U.S. by participating in 50% of the sales effort, subject to certain parameters set forth in the agreement.

Upon completion of the transaction, Immunomedics and Seattle Genetics will each appoint representatives to serve on a Joint Steering Committee (JSC) that will be chaired by a Seattle Genetics representative. The JSC will be responsible for, among other things, determining the overall development, commercialization, manufacturing and intellectual property strategy for IMMU-132.

The companies expect the transaction to close in the first quarter of 2017, subject to expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act, as well as other customary closing conditions.

Upon closing of the transaction, the Immunomedics board and management will evaluate and prioritize the company's remaining clinical programs, long- and short-term funding requirements and tax-efficient ways to return capital to stockholders, including share buybacks. The company will announce the outcome of this review once a decision has been reached.

Immunomedics expects that the transaction will fulfill its liquidity needs such that the company can fund itself without additional equity raises for the foreseeable future.