4-in-1 deal: Forma grabs $225m from Celgene
This article was originally published in Scrip
Forma Therapeutics nabbed a $225m upfront fee to enter into its second collaboration with Celgene, but the agreement is structured as up to four transactions in one – the last deal being an acquisition of Forma by its partner.
Celgene entered into an initial collaboration with Watertown, Massachusetts-based Forma under the companies' new agreement, but it has an option to enter into two additional partnerships, which would give Forma up to $375m in additional upfront fees. The three potential collaborations – with unidentified therapeutic targets – entitle Forma to undisclosed milestone fees and Celgene has an option to acquire the company if all three partnerships are consummated.
It's impossible to put a total value on the collaborators' latest agreement beyond the $600m in potential upfront payments, since the milestone fees over the life of the seven-and-a-half-year deal and the future acquisition value were not publicly reported.
However, the deal gives Forma hundreds of millions of dollars on top of the upfront and milestone fees plus up to $200m in research funding that Celgene committed to the company almost a year ago (scripintelligence.com, 30 April 2013). That agreement focused on discovery and development of drug candidates that regulate protein homeostasis.
"In our first collaboration, we were able to demonstrate how we could execute on our platform and Celgene bought into that," Forma president and CEO Steven Tregay told Scrip.
The company's drug discovery platform can screen 30 to 40 protein target families and more than 100,000 compounds each year with help from Forma's own chemists and a network of academic, clinical and corporate partners.
"Progress in our existing collaboration, coupled with emerging evidence of the power of Forma's platform to generate unique chemical matter across important emerging target families, leads us to expand the collaboration and enable a unique collaborative relationship — one that complements the significant strengths of our internal discovery and development organization," Celgene president of global research and early development Thomas Daniel said in a statement from Forma.
Celgene will let Forma decide which compounds should move into the clinic under the companies' new agreement. Forma will be responsible for Phase I development and can license each compound to a partner of its own choosing if Celgene declines to take a program into later stages of development.
"We understand that there's a whole world out there beyond kinases and we want leadership in that. We are an engine that can rapidly triage through all areas of biology to rapidly validate [thousands of compounds]," Dr Tregay said. "That fits well with Celgene's broader strategy."
Forma will retain US rights to all compounds jointly developed with Celgene, unless Celgene exercises its rights to all three collaborations then opts to buy Forma.
"What's important in Celgene's execution of these deals is that they focus a lot on making sure we're incentivized to create things that we want to put into their partnership," Dr Tregay said.
The collaborations are a good source of non-dilutive financing for Forma, which has raised just $44m in two venture capital rounds since it was founded in 2008. The company also has partnerships with Genentech, Eisai, Novartis, Boehringer Ingelheim, Johnson & Johnson's Janssen Biotech and Cancer Research UK.