BioWorld International Correspondent

Danish antibody development firm Genmab A/S added an extra US$20 million to an already substantial cash pile through an expansion of its existing collaboration with F. Hoffmann-La Roche Ltd.

The enlarged agreement potentially is worth US$100 million in up-front and milestone payments and licensing fees. It does not include royalties, Genmab CEO Lisa Drakeman told BioWorld International.

The up-front payment takes the form of an equity investment in Copenhagen-based Genmab. Basel, Switzerland-based Roche is purchasing 875,378 shares in Genmab, priced at DKK180 per share. That represents a premium of 17 percent to Genmab's share price at the time the deal was entered. Genmab is now sitting on about US$200 million in cash. Part of the proceeds of the current injection will fund the Roche agreement. The rest will be used for general corporate purposes.

In terms of scale, Drakeman said the extent of the collaboration has increased about fourfold from the agreement the companies entered last year. The original deal was not limited, she said, but it was anticipated that it would lead to around five projects. Four are already under way.

"Then they came back to us late last year and said, We really have a lot of new ideas,'" Drakeman said. The companies now anticipate they will enter 15 new projects over the next twelve months.

Genmab has entered multiple agreements with biotechnology companies based on a shared-cost model. It uses genetically engineered mouse strains developed by its co-founder, Medarex Inc., of Princeton, N.J., to generate fully human antibodies to targets supplied by its partners. The agreement with Roche is its first with a major pharmaceutical company.

"The Roche collaboration is interesting for us because they have such good targets," Drakeman said. The deal, she said, is not structured like a typical transgenic mouse agreement. "This has a collaborative aspect to it, which means our milestones and royalties are higher."

The large increase in the scope of the agreement appears unlikely to place any major strain on Genmab's resources. At present, just five of its 154 employees are working on Roche projects. The company anticipates hiring an additional seven or eight employees for Roche-related work over the next 12 months, as part of an overall staff expansion.

"This program is very manageable. Our technology is very efficient," Drakeman said. In total, the company has 15 preclinical development projects under way, including the four existing Roche projects. "We have more than 10 of our own and that number continues to grow," Drakeman said.