Genentech to pay up to $1.7 bn for oncology firm Seragon
03 July 2014
Genentech said is paying up to $1.7 billion for Seragon Pharmaceuticals, a San Diego developer of treatments for the most common kind of breast cancer.
Genentech, part of the Swiss pharmaceutical giant Roche, said it would pay $725 million in cash, plus up to $1 billion when certain milestones were met.
The transaction is expected to close in the third quarter.
South San Francisco's Genentech, said to be the first biotechnology company when it was founded in 1976, said it believed that Seragon's therapies could improve treatment of hormone receptor-positive breast cancer.
Over 220,000 women in the US are diagnosed with breast cancer annually, with around 2 out of 3 cases being hormone receptor-positive, meaning they contained receptors for the hormones estrogen or progesterone.
The condition is typically treated with medicines designed to block the action at the estrogen receptor or interfere with the body's production of estrogen, however, the disease sometimes returns or worsens.
Seragon is working on so called next-generation oral selective estrogen receptor degraders, or SERDs that aim to both block action at the estrogen receptor and eliminate the estrogen receptor from the cell altogether.
According to Roche Holding AG it would pay up to $1.725 billion for the acquisition, Reuters reported.
The company has long dominated the field of breast cancer with drugs including Herceptin and recently won approval for Kadcyla and Perjeta, two treatments for patients whose cancer cells contained increased amounts of the protein known as HER2.
Seragon, founded in August 2013, is an independent venture backed biotech company based in San Diego that was spun out of Aragon Pharmaceuticals, following its acquisition by Johnson & Johnson. Following the spin out, Seragon retained many members of the management and R&D team.
In the US alone, there are approximately 229,000 new breast cancer diagnoses and 40,000 deaths/year related to breast cancer. The vast majority of these cancers are dependent on estrogen signalling and women with ER+ breast cancer are treated with first-generation anti-hormonal therapies such as tamoxifen or the aromatase inhibitors.
These therapies are initially effective, but many patients experience disease progression due to acquired resistance.
Seragon says, in contrast, its own SERDs are next-generation therapies that have a dual mechanism of action in that they both bind to the estrogen receptor to antagonizse hormone action, and they promote receptor degradation.
These SERDs are initially being developed for the treatment of women with late-stage, progressive ER+ metastatic breast cancer, but they also have potential in treating patients with early-stage breast cancer. Furthermore they also may offer an opportunity to be the cornerstone for future combination therapies.
It is focused on development of a new generation of oral medicines that it believed offered an improved way of tackling hormone receptor-positive breast cancer, and potentially other cancers.
The company's most advanced experimental drug, ARN-810, is undergoing Phase I clinical trials for breast cancer patients unresponsive to current hormonal agents.
Reuters reported quoting analysts at Zuercher Kantonalbank that the price for Seragon looked relatively high for a firm with only a single treatment in a Phase I study, but could be justified given that Roche was filling a huge gap for future breast cancer treatments with the purchase.
According to ZKB, the assumption was that Genentech's scientists saw considerable potential in SERDs, because otherwise they would not have accepted the relatively high price.