UPDATE: Novartis, Immunogen To Co-Produce Cancer Drugs

Switzerland's Novartis AG (NVS) and Immunogen Inc (IMGN) Monday said they signed a collaboration deal to develop novel cancer treatments based on the U.S. biotech firm's technology.

As part of the collaboration, Immunogen will receive an upfront fee of $45 million. Milestones payments are also possible and could reach around $200 million per research target, the number of which hasn't been disclosed, Immunogen said.

"This deal reflects the industry-wide interest in our technology and certainly provides more financial flexibility to us," Immunogen Chief Executive Dan Junius told Dow Jones Newswires in an interview.

Immunogen, which already has partnership deals with large pharmaceutical companies and several compounds in clinical research, had about $110 million in cash at the end of June, CEO Junius said.

Under the arrangement Novartis and Immunogen will work together to develop so-called antibody drug conjugates to treat cancer, a novel technology that is considered to be more effective than traditional chemotherapy.

Unlike in chemotherapy, where cancerous and healthy cells are destroyed during treatment, Immunogen's technology includes cancer-killing agents that are attached to an antibody that can be directly transported to affected cells. This targeted therapy is helping reduce side-effects that are common in chemotherapy.

Immunogen already has partnerships with Swiss drug maker Roche Holding AG (ROG.VX) and Sanofi-Aventis SA (SAN.FR) of France.

The collaboration with Roche includes experimental breast cancer drug T-DM1 which, if approved, could turn into a potential blockbuster with more than $1 billion in sales. Although the medicine recently failed to win priority review from U.S. regulators, recent data suggests the medicine could become an effective treatment in breast cancer. Other experimental drugs include SAR3419, which is currently tested in non-Hodgkin's lymphoma and is licensed to Sanofi-Aventis.

CEO Junius said interest in Immunogen's technology is growing and that it would seek partnership to bring the technology forward but that such deals shouldn't disrupt Immunogen's ability to develop its own drug compounds.

-By Goran Mijuk, Dow Jones Newswires, [phone]; [e-mail]