Seattle Genetics Snaps Up Cascadian in $614 Million Buyout Deal
By Mark Terry
The year’s merger-and-acquisition trend continues. Today, the last day of January, Bothell, Washington-based Seattle Genetics announced it is buying Seattle-based Cascadian Therapeutics for about $614 million.
Seattle Genetics is paying $10 per share in cash for Cascadian. Cascadian’s most advanced program is tucatinib, a tyrosine kinase inhibitor that is highly selective for HER2, which is overexpressed in breast, colorectal, ovarian and gastric cancers. In Phase Ib trials, a combination of tucatinib, capecitabine and trastuzumab showed clinical activity in patients with and without brain metastases. The drug is now being evaluated in a global pivotal trial (HER2CLIMB) in HER2-positive (HER2+) metastatic breast cancer, in patients who have and don’t have brain metastases.
“The acquisition would enhance our late-stage clinical pipeline with a potentially best-in-class, orally available and highly selective TKI for patients with HER2-positive metastatic breast cancer,” said Clay Siegall, Seattle Genetics’ president and chief executive officer, in a statement. “Tucatinib would complement our existing pipeline of targeted cancer therapies, provide a third late-stage opportunity for a commercial product in solid tumors and expand our global efforts in breast cancer. It also leverages our broad expertise and resources to advance and expand the tucatinib program for patients. Beyond breast cancer, we believe there may be opportunities for tucatinib in other tumor types, such as HER2-positive metastatic colorectal cancer. Cascadian’s pipeline also includes a preclinical immuno-oncology agent. We look forward to welcoming the team at Cascadian Therapeutics and continuing the momentum of the tucatinib development program.”
Seattle Genetics also announced today that it is starting an underwritten public offering of $550 million shares of its common stock. It also plans to grant the underwriters of the offering a 30-day option to buy up to another $82.5 million shares to cover over-allotments at the public offering price. The proceeds are expected to fund part of the Cascadian acquisition. If that deal should fall through for some reason—both companies’ boards have approved the deal—the net proceeds from the offering would go toward continue commercialization of Adcetris (brentuximab vedotin) in the U.S. and Canada, as well as research-and-development operations to expand the indications for Adcetris and other pipeline candidates.
Seattle Genetics also provided preliminary unaudited consolidated financial results for the fourth quarter and full year 2017. It reported total revenues of $128 to $130 million for the quarter and $481 to $483 million for the full year. Acetris net sales in the U.S. and Canada were $82 to $84 million for the quarter and $306 to $308 million for the full year.
The company has about $413 million in cash, cash equivalents and short-term investments.
Scott Myers, president and chief executive officer of Cascadian, said in a statement, “This agreement represents a very positive outcome for patients with HER2-expressing cancers, our employees and for our stockholders. Seattle Genetics has the development and commercial capabilities and the resources needed to more fully realize the potential of tucatinib as a new best-in-class treatment option for metastatic breast cancer, colorectal cancer and potentially for other indications.”
Tucatinib was invented by Array and licensed to Cascadian Therapeutics in 2014. As part of that deal, Cascadian paid Array $20 million upfront and various milestones. The original deal had a clause saying that if Cascadian was acquired within three years of the effective date of the agreement, Array would be eligible for up to $280 million in commercial and other milestone payments. Array would also be entitled to double-digit royalties based on net sales. It’s not clear, at this time, if that clause expired.