Rockville’s MacroGenics Inc. (NASDAQ: MGNX) is joining forces with Horsham, Pennsylvania-based Janssen Biotech Inc. in a research collaboration that could mean up to $332 million for the local company, just days after winning its first-ever drug approval.
The partners plan to develop a preclinical molecule using MacroGenics’ proprietary dual-affinity retargeting platform, called DART, which creates bispecific antibodies, meaning they can bind to two different antigens in the body. These types of molecules can help destroy cancer cells, among other applications.
But under this deal, the companies plan to use the platform to apply the technology to “two undisclosed targets in a therapeutic area outside oncology,” they said in their announcement Friday.
Under the deal, Janssen would pay MacroGenics $20 million upfront in addition to funding all expenses. The Maryland biotech could also receive up to $312 million in milestone payments and royalties on product sales as part of the global licensing agreement. The parties did not disclose additional terms of the transaction.
“Since our IPO in 2013, we’ve brought in more than $500 million in nondilutive capital through collaborations such as this one," Dr. Scott Koenig, president and CEO of MacroGenics, said Monday in an email to the Washington Business Journal. "The upfront payment provided by Janssen will help support our robust pipeline of eight clinical assets in oncology as well as advance our proprietary antibody-based technology platforms.”
It’s not the first time MacroGenics, which focuses on antibody-based cancer treatments, has teamed up with Janssen Biotech, part of New Brunswick, New Jersey-based Johnson & Johnson’s (NYSE: JNJ) pharmaceuticals division. The companies formed previous licensing agreements involving the DART platform in December 2014, which Janssen later terminated, as well as in May 2016.
The company’s share price was down a few percentage points Monday early afternoon to $24.40 per share.
The news Friday came just two days after MacroGenics announced an earlier-than-expected regulatory approval for Margenza, its treatment for patients with metastatic HER2-positive breast cancer in combination with chemotherapy. That therapeutic, expected to become available in March, marks the first drug the 20-year-old Montgomery County biotech will take to market — and a momentous feat in the industry.
The product holds enormous promise for MacroGenics, whose revenue up to this point has come mainly from licensing deals, and in a breast cancer drug market that’s estimated to grow by at least $30 billion by 2026. The company said it has spent more than $77 million on alone in research and development for Margenza over the past couple of years; it also has eight candidates now in clinical development, including a molecule it’s studying in acute myeloid leukemia, a cancer in the blood and bone marrow. The biotech is also advancing trials of margetuximab, the active ingredient in Margenza, in patients with gastric cancer.
The deal with Janssen follows a five-year agreement MacroGenics inked earlier this month with Milwaukee life sciences firm Eversana to help it sell the therapy in the U.S. at a greater scale. The local company, which counts 384 full-time employees, said it plans to partner with more third parties to sell and distribute the product rather than build up its own sales team.
That preceded a 2018 licensing deal MacroGenics signed with Zai Lab Ltd. for that company to further develop and sell the drug in its territories of mainland China, Hong Kong, Macau and Taiwan should it win approval there. That deal has the potential to yield MacroGenics another $140 million in milestone payments from Zai Lab, not including royalties on the sales themselves.
