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Incyte enters $900 million deal for rights to MGA012

USA-based Incyte Corp (Nasdaq: INCY) has entered into an exclusive global collaboration and license agreement for MacroGenics’ (Nasdaq: MGNX) MGA012, an investigational monoclonal antibody that inhibits programmed cell death protein 1 (PD-1).

Incyte has obtained exclusive worldwide rights for the development and commercialization of MGA012 in all indications, while MacroGenics retains the right to develop its pipeline assets in combination with MGA012.

News of the deal drove shares of MacroGenics up 18% in the mid-afternoon. Incyte shares gained just over 1% to $1115.71.

Terms of the collaboration

Upon closing, Incyte will pay MacroGenics an upfront $150 million. Incyte will receive worldwide rights to develop and commercialize MGA012 in all indications. MacroGenics will also be eligible to receive up to $420 million in potential development and regulatory milestones, and up to $330 million in future commercial milestones. If MGA012 is approved and commercialized, MacroGenics would be eligible to receive royalties, tiered from 15%-24%, on future sales of MGA012 by Incyte.

Under the terms of the collaboration, Incyte will lead global development of MGA012. MacroGenics retains the right to develop its pipeline assets in combination with MGA012, with Incyte commercializing MGA012 and MacroGenics commercializing its asset(s), if any such potential combinations are approved.

In addition, MacroGenics retains the right to manufacture a portion of both companies’ global clinical and commercial supply needs of MGA012. MacroGenics intends to utilize its commercial-scale GMP facility, which is expected to be fully operational in 2018.

Big gamble?

This is a very interesting development...yet another big pharma company entering the fray in immune checkpoint inhibitor development, commented Dr Zach Hartman on the Seeking Alpha blog.

How many companies will have their own PD-1 drug by the time all is said and done? Impossible to say at this point, but Incyte is making a big gamble here, offering up over half a billion dollars to acquire the rights to MGA012. And with more players and more indications in the space, it is difficult to imagine how newcomers are going to enter the market and compete. But hopefully this will turn into price competition as well since these drugs are so expensive, said Dr Hartman.

Last year MacroGenics entered into a collaboration and license agreement for MGD015, a preclinical bispecific molecule, with Janssen Biotech, which could bring in up to $740 million.

The deal comes two years after Incyte entered a deal with China’s Jiangsu Hengrui Medicine for an anti-PD-1 drug dubbed SHR-1210. In exchange for $25 million upfront and a heavily back ended $770 million package of milestones.



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