Micromet, Inc. (MITI) recently announced yet another cancer drug development deal with biotech giant Amgen, Inc. (AMGN). Micromet has signed a collaboration agreement with Amgen under which it will develop BiTE antibodies against three undisclosed solid tumor targets. BiTE antibodies represent a new class of antibodies that activate the T-cells of a patient’s immune system to eliminate cancer cells.
Per the terms of the deal, Micromet will be responsible for the discovery and pre clinical development of the BiTE antibodies. Once Micromet is successful in developing products targeting solid tumors, Amgen reserves the right to pursue development, manufacturing, and commercialization of BiTE antibodies against upto two of the three targets. Amgen will make an upfront payment of EUR 10 million upon execution of the deal. Micromet will also be entitled to receive potential payments of approximately EUR 695 million if Amgen undertakes two programs. In addition, Amgen will reimburse all costs of research and developmet of the BiTE antibodies to Micromet.
We consider the deal to be in sync with other such contracts entered upon by Micromet with pharma giants like Bayer (BAYRY), AstraZeneca (AZN), Sanofi Aventis (SNY) among others. All of these endeavors are focused on developing BiTE antibodies against undisclosed solid tumor targets.
Micromet’s lead pipeline candidate is blinatumomab which it is developing on its own. Blinatumomub is also a BiTE antibody, currently being studied for the treatment of acute lymphoblastic leukemia (ALL).
Our Recommendation
Currently, we have a Neutral stance on Micromet. The stock carries a Zacks #3 Rank (short-term Hold recommendation).
We believe blinatumomab, holds tremendous potential in the treatment of ALL. We are pleased with Micromet’s re-acquisition of its blinatumomab rights from MedImmune, a wholly owned subsidiary of AstraZeneca, which will enable the company to re-license the drug at more attractive terms. However, we believe that Micromet requires the strength of a large established player to accelerate blinatumomab’s development in order to gain a head-start over potential competitors on approval. We are also concerned about its early stage pipeline. Accordingly, we prefer to remain on the sidelines.
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