Glaxo buys Genmab's leukemia drug for record $2.1 billion

Mumbai: GlaxoSmithKline Plc (GSK) has bought global rights to Danish biotech company Genmab's leukemia drug for a record $2.1 billion, the firm said in statement.

One of the most promising of new drugs, the HuMax-CD20 is an experimental human antibody in late-stage development for CD20 positive B-cell chronic lymphocytic leukemia and follicular non-Hodgkin's lymphoma.

The drug, which is also in Phase II trials for rheumatoid arthritis, is similar to MabThera / Rituxan from Roche Holding AG and Genentech Inc.

The deal, the biggest ever clinched by a biotech company, eclipses the $2 billion Erbitux deal between ImClone Systems Inc and Bristol-Myers Squibb Co, which was later scaled down in 2002 after the drug hit snags.

Shares of Genmab, which is yet to make a profit, surged 24 per cent to a high of 424 Danish crowns, valuing the business at close to $3 billion.

This is the second deal by Glaxo in the fast-growing antibody arena in less than two weeks, following its agreement to buy early-stage drug firm Domantis for 230 million pounds ($449 million) on December 8.

Large pharmaceutical companies eager to tap biotech know-how are acquiring a string of products to boost their drug pipelines, paying up huge prices amidst fierce competition for last-lap drugs.

GSK, Europe's biggest drugmaker, is looking at increasing its presence in the biological medicines, such as antibodies.

While the new drug, HuMax-CD20, could add to GSK's growing cancer portfolio in the near future, the tie-up with Genmab also increases Glaxo's presence in next-generation antibody technology, since it will have an exclusive option to CD20 UniBody.

Unibody is a new antibody technology developed by Genmab offering a smaller format, which means it may work more effectively than existing monoclonal antibodies. This dovetails with Domantis's similar ultra-small antibody technology.

Genmab is to maintain a key role in the future of HuMax-CD20 in an arrangement that underlines the strong negotiating hand of successful biotech companies.

It will be responsible for development costs until 2008, and will have an option to co-promote HuMax-CD20 as a cancer treatment in the United States and the Nordic region.

Genmab will also have an option to co-promote Glaxo's drugs Bexxar and Arranon in the United States and Atriance in Nordic countries.

Genmab expects to seek regulatory approval for HuMax-CD20 by 2008 which could generate well over $2 billion in annual sales.