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Adaptimmune (ADAP) Gains on Deal With Roche for Cell Therapies

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Shares of Adaptimmune Therapeutics plc have soared 28.9% in response to its collaboration and license agreement with Genentech, a unit of Roche (RHHBY - Free Report) .

The collaboration focuses on the development of allogeneic T-cell therapies for up to five shared cancer targets and the development of personalized allogeneic T-cell therapies.

Investors cheered the news as Roche has a strong presence in the oncology space.

Adaptimmune will be responsible for developing clinical candidates using its induced pluripotent stem cell (iPSC) derived allogeneic platform to produce T-cells (iT cells) for each component. Genentech will be responsible for the input TCRs and subsequent clinical development and commercialization.

Per the terms of the agreement, Adaptimmune will receive an upfront payment of $150 million and additional payments of $150 million over five years, unless the agreement is earlier terminated. Additionally, the company is entitled to receive research, development, regulatory, and commercial milestones payments of more than $3 billion in aggregate value. Adaptimmune will also receive tiered royalties on net sales in the mid-single to low-double digits.

Adaptimmune obtains the right to opt in to an equal profit and cost-sharing arrangement in the United States for "off-the-shelf" products. If it elects to opt in, then the company will be eligible to share 50% of profits and losses from sales in the country on such products and is eligible to receive ex-U.S. regulatory and sales-based milestone payments, as well as royalties on ex-U.S. net sales.

Shares of the company have gained 18.2% year to date compared with the industry’s growth of 2.7%.

 

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The deal bodes well for Adaptimmune given the influx of cash and Roche’s expertise. Adaptimmune is focused on the development of novel cancer immunotherapy products. The company’s cell therapy candidates include Specific Peptide Enhanced Affinity Receptor (SPEAR) T-cells, which use genetically engineered T-cell receptors; next-generation T-cell Infiltrating Lymphocytes (TiLs) where a patient’s T-cells are co-administered with its next-generation technology, and HLA-independent TCRs (HiTs) where surface proteins are targeted independently of the peptide-HLA complex.

The SPEARHEAD-1 phase II study with afamitresgene autoleucel is underway in synovial sarcoma and myxoid round cell liposarcoma (MRCLS) indications in which the MAGE-A4 antigen is expressed. A phase II study combining afamitresgene autoleucel with Merck’s (MRK - Free Report) Keytruda in patients with head and neck cancer expressing the MAGE-A4 antigen is underway in the United States.

The company also has a collaboration agreement with GlaxoSmithKline (GSK - Free Report) for the development, manufacture, and commercialization of TCR therapeutic candidates.

Currently, Adaptimmune is a Zacks Rank #3 (Hold) stock. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.



 

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