Stock Soars as Immunomedics CEO, COO Exit and Seattle Genetics Dumps $2 Billion Deal
May 5, 2017
By Alex Keown, BioSpace.com Breaking News Staff
BOTHELL, Wash. – Shares of Immunomedics are soaring more than 22 percent this morning after Seattle Genetics backed out of a $2 billion deal with the company. Immunomedics will be under new management, as its chief executive officer and chief scientific officer will step down.
The deal to develop IMMU-132, Immunomedics' proprietary solid tumor therapy candidate, ran into some troubles following a legal challenge filed by activist investor venBio Select Advisor LLC. In March, a judge in the Delaware Chancery court issued a 30-day restraining order, which delayed the close of the deal between the two companies. This morning, Seattle Genetics said due to the delays and litigation to complete the deal, it was walking away.
Clay Siegall, president and chief executive officer of Seattle Genetics, said the company will now turn its full attention to its own pipeline “and the substantial opportunities in front of us.” Particularly Siegall pointed to upcoming topline data readout from the ADCETRIS ECHELON-1 trial and ongoing or planned pivotal trials of vadastuximab talirine (SGN-CD33A) and enfortumab vedotin (ASG-22ME).
Although Seattle Genetics is walking away from the deal with Immunomedics, the company continues to hold three million shares of common stock as well as a warrant to purchase an additional 8.7 million shares at $4.90 per share exercisable until Dec. 31 of this year.
Behzad Aghazadeh, managing partner of venBio and the new chairman of the board at Immunomedics following a March shareholder meeting, touted his company’s ability to manage development of IMMU-132 on its own. When the deal with Seattle Genetics was struck, Aghazadeh objected, saying the company was giving away “its crown jewel” therapy. He was also highly critical of the pricing option for Seattle Genetics to acquire Immunomedics stock.
Once the deal with Seattle Genetics is fully resolved, Immunomedics CEO Cynthia Sullivan and CSO David Goldenberg will resign from their positions. Michael Garone, the current chief financial officer at Immunomedics will become the new CEO. Goldenberg, a co-founder of the company, will continue to serve as a director on the company board.
As the company transitions to new leadership, Aghazadeh said the company will focus on IMMU-132 and has an updated timeline to bring the drug to market. Immunomedics is planning to submit a BLA to the U.S. Food and Drug Administration (FDA) by the end of 2017 or the beginning of 2018. The company said Phase II data is providing the basis for accelerated approval, subject to FDA review.
IMMU-132, sacituzumab govitecan, is a novel antibody-drug conjugate that binds to a protein found on many cancer cells called TROP-2. By bonding with the cancer cells, IMMU-132 can then deliver a dose of a chemo agent into the cell, hopefully killing it. IMMU-132, its lead investigational antibody-drug conjugate, sacituzumab govitecan, earned a Breakthrough Therapy designation by the U.S. Food and Drug Administration in February 2016.
Shares of Immunomedics are trading at $6.51 as of 10:36 a.m. Shares of Seattle Genetics are down nearly 4 percent this morning, trading at $61.47.