Major investor venBio seeks to derail deal and replace board members

Seattle Genetics has agreed a development and licensing agreement for Immunomedics’ cancer therapy candidate IMMU-132 (sacituzumab govitecan). Immunomedics stands to receive an upfront payment of $250 million (£201 million) and potential milestone payments of up to $1.7 billion, dependent on regulatory approvals, plus royalties on any eventual sales.

In response to the deal, investment fund venBio – owner of a 9.9% stake in Immunomedics – criticised both the timing of the deal and the Immunomedics board. Behzad Aghazadeh, a managing partner at venBio, accused Immunomedics of rushing the deal through ahead of the company’s annual shareholder meeting, at which venBio is pushing to replace four board members with its own nominees.

A legal motion filed by venBio to stop the deal was rejected by the Delaware Court of Chancery. Immunomedics described the suit as ‘baseless, selfish and shameful’, claiming that venBio was trying to take control of the company for its own benefit. Immunomedics also filed its own lawsuit against venBio for withholding information in violation of US Federal Securities law.

Immunomedics has agreed to postpone its annual meeting to allow shareholders to consider the deal and shop for alternatives. It has also agreed to put off completion of the deal until after the shareholder meeting.

If the deal goes ahead, Seattle Genetics will take the lead on a new Phase III clinical trial of the antibody-drug conjugate IMMU-132 for patients who have not responded to therapies for triple negative breast cancer. The drug is also in Phase I/II trials for treatment of several epithelial tumour types.

Seattle Genetics would also buy 3 million shares (a 2.8% stake) in Immunomedics for approximately $15 million and have the option to purchase almost 8.7 million more, at the same price, within the next three years.