Knobias Clip Report (04-01-2008)
Submitted By Knobias ClipReport
CEGE: CEO Discusses Takeda Agreement for GVAX Immunotherapy in Prostate Cancer
Shares of Cell Genesys, Inc. (CEGE) surged in today’s session following the announcement of a global alliance with Takeda Pharmaceutical Company Limited for the development and commercialization of GVAX immunotherapy for prostate cancer.
Takeda has agreed to pay $50 million to the Company, plus up to $270 million in milestones in exchange for the exclusive global commercial rights to its prostate cancer treatment.
The Chairman and CEO of Cell Genesys, Dr. Stephen A. Sherwin, explained in a conference call last night, The $50 million upfront payment does not include any equity component. Takeda will pay all Phase III external development costs, as well as pre-commercial and commercial costs.”
“The royalty structure was a key consideration for us. Royalties will be tiered and double-digit on U.S. sales. They will be flat double-digit royalties in all other regions. We have retained co-promotion rights in the U.S. The royalties would not be impacted by co-promotion options.”
Dr Sherwin commented, “In our view this is one of the most important transactions in the history of this company. We have negotiated the best possible deal and the best possible partner for this product. Takeda has made a clear committment to the GVAx prostate program, and they have a special interest in prostate cancer and are looking to build their oncology segment. It is important to note, Takeda pioneered and developed Lupron(R), the standard of care for hormonal prostate cancer therapy. They have unparraleled experience in the prostate area.”
“With Takeda’s record of accomplishment, performing a partnership now provides us with a colleague that has extensive experience for the development of this product. We believe that it should increase efficiency and probability of success. We have a complimentary fit and a common vision for this product. Takeda takes their alliances very seriously and knows how to make them successful.”
“Cell Genesys is not actively seeking to be acquired and this transaction only involves one of our products.”
“This will not be the end of news flow from us this year. We will have more to say and updates during several upcoming conference presentations. You can also anticipate additional news into 2009.”
After the Company announced an alliance with Takeda Pharmaceutical (TKPHF), Cantor Fitzgerald reiterated its BUY rating and thinks the deal confirms the commercial potential of Cell Genesys’ GVAX prostate, while removing uncertainty about the GVAX prostate launch and commercialization. The firm sees several catalysts for the company over the next two months.
The GVAX immunotherapies are cancer treatments designed to stimulate the patient’s immune system to effectively fight cancer. GVAX cancer immunotherapies are comprised of tumor cells that are genetically modified to secrete an immune-stimulating cytokine known as granulocyte-macrophage colony-stimulating factor, or GM-CSF, and are then irradiated for safety. Since GVAX cancer immunotherapies consist of whole tumor cells, the cancer patient’s immune system can be activated against multiple tumor cell components, or antigens, potentially resulting in greater clinical benefit than if the immunotherapy consisted of only a single tumor cell component. Additionally, the secretion of GM-CSF by the modified tumor cells can greatly enhance the immune response by recruiting and activating dendritic cells at the injection site, a critical step in the optimal response by the immune system to any immunotherapy product. The antitumor immune response which occurs throughout the body following administration of a GVAX product can potentially result in the destruction of tumor cells that persist or recur following surgery, radiation therapy or chemotherapy treatment.
In addition to the ongoing Phase 3 clinical trial of GVAX immunotherapy for prostate cancer, the Company is currently pursuing Phase 2 clinical trial for GVAX immunotherapies for pancreatic cancer and for leukemia. The Company is also pursuing a Phase 1 trial of CG0070 oncolytic virus therapy for bladder cancer.
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