ImmunoGen, Inc. (NASDAQ:IMGN) announced selling its residual rights so that it can receive royalty payments on the commercial sales of Kadcyla (ado-trastuzumab emtansine) to OMERS which is a benefit pension plan for several employees in Ontario province, Canada, worth $65 million.
Enhancing the Process for Cancer Patients
From a glance it may seem like the leader in antibody-drug conjugates (ADCs) for cancer treatment may have bottled it, but looking closely and following the words of its President and Chief Executive Officer, Mark Enyedy, there are brighter days ahead.
According to Enyedy, the transaction with OMERS only strengthens their balance sheet which will propel the strategic priorities in their effort of delivering more options to individuals living with hard-to-treat cancer.
All in Detail
Kadcyla is the approved ADC for treatment of HER2-positive breast cancer, and ImmunoGen has been behind in its generation as well as its early development. It’s all about developing a next generation of the ADC to improve the outcomes for patients with cancer significantly.
The main agenda is to disrupt cancer progression in patients through the generation of targeted therapies with enhanced anti-tumor activity as well as favorable tolerability profiles.
The transaction entails a sale of residual interest that ImmunoGen holds from an initial deal with the Immunity Royalty Holdings, L.P. (IRH). There was a $200m non-dilutive royalty transaction which ImmunoGen had sold the right to receive 100% royalty revenue on the Kadcyla commercial sales. However, the threshold amount was undisclosed and subject to some conditions.
Therefore, with the threshold being met, it means ImmunoGen was due to 85% of Kadcyla royalty revenue while the original purchaser is receiving 15% of the remaining royalty term. The transaction with OMERS implies that the benefit pension plan now owns 100 percent of ImmunoGen rights to receive Kadcyla royalties.
The deal is suitable for both parties, but with the current state around the treatment of cancer, it’s more a win-win situation all the same for cancer patients. The “target a better now” narrative is all that everyone wants to see and for it to happen the steps are evident but time will tell better.