Amgen Taps ImmunoGen

Yesterday, ImmunoGen Inc. (IMGN - Snapshot Report) announced that it has licensed its technology to Amgen Inc. (AMGN - Analyst Report) to develop anticancer drugs. The deal allows Amgen exclusive rights to use ImmunoGen’s maytansinoid targeted antibody payload (TAP) technology for developing anticancer therapeutics to an undisclosed target found on solid tumors.

According to the terms of the deal, ImmunoGen will receive $1 million in an upfront license payment. Furthermore, it is entitled to receive milestone payments of up to $34 million coupled with royalties on the sales of any resulting products. The responsibility for the development, manufacturing and marketing of any products resulting from the deal lies with Amgen.

This license was taken under an agreement established in September 2000 between ImmunoGen and Abgenix, Inc. The latter has since been acquired by Amgen. The agreement allows Amgen to test ImmunoGen’s maytansinoid TAP technology with antibodies to specific targets, and to license the right to use the technology with antibodies to these targets for product development. We believe that the deal will expand Amgen’s reach in the field of antibody-based therapeutics.

We remind investors that Amgen is keenly awaiting approval for denosumab (proposed trade name Prolia) for the treatment and prevention of postmenopausal osteoporosis (PMO) and bone loss in patients undergoing hormone ablation for either prostate or breast cancer. The U.S. Food and Drug Administration (FDA) is scheduled to rule on the approval of denosumab by October 19, 2009.

Based on encouraging late-stage clinical data, we believe the candidate has the potential to capture a major chunk of the osteoporosis market once launched. The osteoporosis market represents huge commercial potential with global sales of osteoporosis medications coming in at about $8.4 billion in 2008. Although we are optimistic on denosumab, a delay in receiving regulatory approval would weigh heavily on the stock.

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