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seattlegeneticsSeattle Genetics has agreed to license its antibody-drug conjugate technology to Bayer HealthCare, a deal that could be worth as much as $520 million if milestones ar met. Shares of Seattle Genetics are slumping on the news, down more than three percent.

As part of the deal, Bayer is paying $20 million in upfront fees to gain worldwide rights to antibodies from Seattle Genetics that could be used in several cancer treatments. Seattle Genetics also could receive $500 million in payments, as well as royalties on sales of any drugs developed from the program. Natasha Hernday, Vice President of Corporate Development at Seattle Genetics, pegs the total potential package of the deal at $3.5 billion.

Bayer is responsible for research, product development, manufacturing and commercialization of all products as part of the partnership.

“Bayer is committed to translating the science of cancers into effective therapies that can help people with cancer live longer and improve their quality of life,” said Andreas Busch, Member of the Bayer HealthCare Executive Committee and Head of Global Drug Discovery. “Antibody-drug conjugates are promising approaches in oncology which can attack tumor cells in a much more targeted way for cancer patients, such that healthy cells are less severely affected. Antibody-drug conjugates are one of our focus areas in oncology research and we are looking forward to strengthening our portfolio in this area of personalized medicine through the collaboration with Seattle Genetics.”

Led by Clay Siegall, Seattle Genetics posted a net loss of $16.3 million on revenues of $573 million during the first quarter. At the end of March, it had $344.1 million in cash and cash equivalents.

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