Seattle Genetics Eliminates $2 Billion Deal With Immunomedics

On Friday,  it was announced that Seattle Genetics (SGEN) had ended a potential $2 billion deal with Immunomedics (IMMU). The initial deal was proposed back in February of this year. The deal was created for a licensing deal relating to a solid tumor cancer product known as IMMU-132. Immunomedics was supposed to receive an upfront payment of $250 million but that payment was put on hold in March as shareholders revolted. It seems they didn’t think the deal was fair.

The whole thing happened because many large investors, including one known as venBio was able to create a shuffle on the board of directors. The reason for changing the board of directors in Immunomedics was that the investors were not happy in creating this possible deal with Seattle Genetics. They stated that the deal was rushed and not thought out at all. Even with the deal not closing, Seattle Genetics will continue to hold 3 million shares of Immunomedics stock.

Seattle Genetics is leading away from the deal and instead focusing on its own pipeline candidates. The company has a phase 3 clinical trial candidate that is set to release results in the near-term. The phase 3 trial is known as ADCETRIS ECHELON-1 and is treating patients with Mature T-Cell Lymphoma. Seattle Genetics will continue to work on other products in the pipeline, therefore this deal will not hurt the company in anyway. The deal does effect Immunomedics who stood to eventually receive $2 billion in milestone payments.

Disclosure: I have no positions in any stocks mentioned

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