Forma Strikes $200M Deal With Celgene to Discover Cancer Drugs
Forma Therapeutics has never had trouble finding partners who want access to its early-stage drug discovery team, when most companies are cutting back there. But the Watertown, MA-based company is entering into a different kind of deal with Celgene that could turn Forma into a bigger enterprise that discovers, develops, to someday markets its own drugs.
The deal being announced today provides Summit, NJ-based Celgene (NASDAQ: CELG) exclusive commercial access outside the U.S. to compounds that Forma’s drug discovery team comes up with in the emerging field of protein homeostasis.
While this deal has its share of “biobucks”—large, success-based milestone payments that are likely to never materialize—it’s also unusually lucrative for the small company. Celgene has committed $200 million to Forma in a combination of upfront and early R&D payments.
Although Forma isn’t disclosing the size of the upfront check it’s getting from Celgene, the five-year-old drug discovery company expects to have booked an aggregate of $165 million in revenue from its combined partnerships by the end of this year, and $315 million in combined partnership revenue by the end of 2017, according to Forma CEO Steven Tregay. Forma currently has 105 employees, and expects to grow to 125-130 people by the end of this year, he says.
In case you read that last paragraph fast, here’s one point that shouldn’t be overlooked. The Celgene deal allows Forma to retain the commercial rights to protein homeostasis-based drugs in the U.S.—still the world’s largest pharmaceutical market. That means Forma didn’t have to give away the farm to get that $200 million base of R&D support, so if it uses the money wisely, it could maneuver into a position of someday selling its own products, and generating its own cash flow, rather than just always licensing out compounds that other companies profit from.
“The largest deal we’ve done, by quite a bit,” Tregay says of today’s news. “There’s a commitment of $200 million to really win in this area if we’re successful, and to allow Forma to grow up as a company. It’s an amazing deal, and an amazing area of science.”
Celgene, as avid readers of Xconomy probably know already, has formed a wide variety of partnerships with some of the most innovative biotech startups of the past five years. It has struck deals with Cambridge, MA-based Agios Pharmaceuticals, Cambridge-based Epizyme, Seattle-based VentiRx Pharmaceuticals, and San Francisco-based Quanticel Pharmaceuticals, among others. Those companies represent edgy plays in the fields of cancer metabolism, epigenetics, cancer immunotherapy, and cancer genomics, respectively.
By cozying up with Forma, Celgene is getting … Next Page »