M&A Activity • Aug 30, 2012
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Ad-hoc | 30 August 2012 06:31
Genmab Enters Worldwide Agreement with Janssen for Daratumumab
Genmab A/S
30.08.2012 06:31
Dissemination of a Adhoc News, transmitted by DGAP - a company of
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The issuer is solely responsible for the content of this announcement.
Company Announcement
Copenhagen, Denmark; August 30, 2012 - Genmab A/S (OMX: GEN) announced today a
global license and development agreement for daratumumab (HuMax(r)-CD38), a human
CD38 monoclonal antibody with Janssen Biotech, Inc., one of the Janssen
Pharmaceutical Companies of Johnson & Johnson (Janssen). Daratumumab is
currently in development for multiple myeloma and may have potential in other
cancer indications such as acute myeloid leukemia. Under the terms of the
agreement, Genmab will grant Janssen an exclusive worldwide license to develop
and commercialize daratumumab as well as a backup human CD38 antibody.
Under the terms of the agreement, Genmab will receive an upfront license fee of
$55 million (approximately DKK 327 million) and Johnson & Johnson Development
Corporation (JJDC) will invest DKK 475 million, (approximately $80 million) to
subscribe for 5.4 million new shares of Genmab at a price of DKK 88 per share.
Genmab's closing share price on August 29, 2012 was DKK 67.85. Genmab could
also be entitled to up to $1 billion in development, regulatory and sales
milestones, in addition to tiered double digit royalties. Janssen will be
fully responsible for all costs associated with developing and commercializing
daratumumab going forward, including the costs of two ongoing Phase I/II
studies.
'Janssen was one of the first companies to recognize the power and promise of
monoclonal antibodies and today is a world leader in biologics; we look forward
to applying that same expertise to daratumumab to help meet the needs of
patients with multiple myeloma,' said William N. Hait, M.D., Ph.D., Head of
Janssen Research & Development, LLC. 'Daratumumab is an exciting, innovative
compound, and we are delighted to add it to our portfolio.'
'We are very pleased to partner with Janssen on another Genmab innovation and
look forward to working with them to accelerate the development of daratumumab
and to maximize the value of this product,' said Jan van de Winkel, Ph.D.,
Chief Executive Officer of Genmab. 'This agreement significantly strengthens
our financial position, ensuring that Genmab can continue to develop much
needed differentiated antibody therapeutics to help cancer patients in the
future.'
The transaction is subject to customary closing conditions, including approval
of a prospectus by the Danish Financial Supervisory Authority and clearance by
the US antitrust authorities under the Hart-Scott-Rodino Act, and will become
final as soon as these conditions have been met.
OUTLOOK
MDKK Revised Guidance** Previous Guidance
August 30, 2012 August 15, 2012
Revenue 435 - 460 375 - 400
Operating expenses (600) - (625) (600) - (625)
Operating loss continuing operations (140) - (190) (200) - (250)
Discontinued operation (40) (40)
Cash position beginning of year* 1,105 1,105
Cash used in operations (375) - (400) (375) - (400)
Cash from license agreement & 800 -
share subscription agreement
Cash position at end of year* excl. MN 1,505 - 1,530 705 - 730
sale
Facility sale 320 320
Cash position at end of year* 1,825 - 1,850 1,025 - 1,050
*Cash, cash equivalents, and marketable securities
**Dependent on closing of the transaction with Janssen and JJDC
Continuing Operations
We expect our 2012 revenue to now be in the range of DKK 435 - 460 million, an
improvement of DKK 60 million from the previous DKK 375 - 400 million. The
increased revenue is primarily due to the daratumumab license agreement and
share subscription agreement entered into with Janssen and JJDC, respectively.
The agreements include reimbursement of certain research and development costs
and the amortization of the upfront payment and a part of the share premium
which initially is recognized as deferred income and allocated as revenue over
a number of years.
Our revenue consists primarily of non-cash amortization of deferred revenue
totaling DKK 250 million (previous guidance was DKK 230 million) and royalties
on sales of Arzerra, which still are expected to be in the range of DKK 90 -
100 million.
We anticipate that our 2012 operating expenses from continuing operations will
remain the same as the previous guidance at DKK 600 - 625 million.
With the increase in revenue and no change to the operating expense guidance,
the operating loss also improves. We expect the operating loss from continuing
operations for 2012 to be approximately DKK 140 - 190 million, an improvement
of DKK 60 million over the previous guidance of DKK 200 - 250 million.
Discontinued Operation
The discontinued operation guidance of DKK 40 million relates to the ongoing
running costs of maintaining the Minnesota manufacturing facility in a
validated state and represents a full 12 months of activity. This expense could
be lower if the facility is sold before the end of the year.
The fair value of the facility less cost to sell is currently estimated to be
USD 58 million, approximately DKK 320 million at an assumed exchange rate of
USD 1.00 = DKK 5.50. As of August 29, 2012, the exchange rate between USD and
DKK was 5.9388. We remain focused on entering a sales agreement and anticipate
the sale of the facility in 2012.
Cash Position
As of December 31, 2011, we had a cash position of DKK 1,105 million and are
still projecting a cash burn from operations in 2012 of DKK 375 - 400 million
as the reimbursement of certain research and development costs under the
daratumumab license agreement will be received in early 2013.
We are now projecting a cash position at the end of 2012, excluding the
facility sale, of DKK 1,505 - 1,530 million, an increase of DKK 800 million
compared to the previous guidance of DKK 705 - 730 million. The improvement is
due to the equity investment and upfront payment related to the daratumumab
license agreement and share subscription agreement. Taking into account the
planned sale of the facility, the projected cash position at the end of 2012
would increase by DKK 320 million to DKK 1,825 - 1,850 million, compared to the
previous guidance of DKK 1,025 - 1,050 million.
In addition to factors already mentioned, the estimates above are subject to
change for numerous reasons, including but not limited to, closing of the
transaction with Janssen and JJDC, the timing and variation of development
activities (including activities carried out by our collaboration partners) and
related income and costs; the successful completion of the manufacturing
facility sale; fluctuations in the value of our marketable securities; Arzerra
sales and corresponding royalties to Genmab; and currency exchange rates. The
financial guidance also assumes that no significant new agreements are entered
into during 2012 that could materially affect the results.
Conference Call
Genmab will hold a conference call in English to discuss this news today,
Thursday August 30, 2012, at 9:00 am CEST, 08:00 am BST (3:00 am EDT). The dial
in numbers are:
+1 718 354 1226 (US participants) and ask for the Genmab conference call
+44 207 509 5139 (international participants) and ask for the Genmab conference
call
A live and archived webcast of the call and relevant slides will be available
at www.genmab.com.
About daratumumab
Daratumumab is a human CD38 monoclonal antibody with broad-spectrum killing
activity. Daratumumab is in clinical development for multiple myeloma (MM).
Daratumumab targets the CD38 molecule which is highly expressed on the surface
of multiple myeloma cells. Daratumumab could also have potential in other
tumors on which CD38 is expressed.
About Genmab A/S
Genmab is a publicly traded, international biotechnology company specializing
in the creation and development of differentiated human antibody therapeutics
for the treatment of cancer. Founded in 1999, the company's first marketed
antibody, ofatumumab (Arzerra(r)), was approved to treat chronic lymphocytic
leukemia in patients who are refractory to fludarabine and alemtuzumab after
less than eight years in development. Genmab's validated and next generation
antibody technologies are expected to provide a steady stream of future product
candidates. Partnering of innovative product candidates and technologies is a
key focus of Genmab's strategy and the company has alliances with top tier
pharmaceutical and biotechnology companies. For more information visit
www.genmab.com.
Contact:
Rachel Curtis Gravesen, Senior Vice President, Investor Relations &
Communications
T: +45 33 44 77 20; M: +45 25 12 62 60; E: [email protected]
This Company Announcement contains forward looking statements. The words
'believe', 'expect', 'anticipate', 'intend' and 'plan' and similar expressions
identify forward looking statements. Actual results or performance may differ
materially from any future results or performance expressed or implied by such
statements. The important factors that could cause our actual results or
performance to differ materially include, among others, risks associated with
pre-clinical and clinical development of products, uncertainties related to the
outcome and conduct of clinical trials including unforeseen safety issues,
uncertainties related to product manufacturing, the lack of market acceptance
of our products, our inability to manage growth, the competitive environment in
relation to our business area and markets, our inability to attract and retain
suitably qualified personnel, the unenforceability or lack of protection of our
patents and proprietary rights, our relationships with affiliated entities,
changes and developments in technology which may render our products obsolete,
and other factors. For a further discussion of these risks, please refer to the
risk management sections in Genmab's most recent financial reports, which are
available on www.genmab.com. Genmab does not undertake any obligation to update
or revise forward looking statements in this Company Announcement nor to
confirm such statements in relation to actual results, unless required by law.
Genmab(r); the Y-shaped Genmab logo(r); HuMax(r); HuMax-CD20(r); HuMax(r)-EGFr;
HuMax(r)-IL8; HuMax(r)-TAC; HuMax(r)-CD38; HuMax(r)-TF; HuMax(r)-TF-ADC; HuMax(r)-Her2;
HuMax(r)-cMet, HuMax(r)-CD74, DuoBody(tm) and UniBody(r) are all trademarks of Genmab
A/S. Arzerra(r) is a trademark of GlaxoSmithKline.
Company Announcement no. 20
CVR no. 2102 3884
Genmab A/S
Bredgade 34
1260 Copenhagen K
Denmark
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News Source: NASDAQ OMX
30.08.2012 DGAP's Distribution Services include Regulatory Announcements,
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Language: English
Company: Genmab A/S
Denmark
Phone:
Fax:
E-mail:
Internet:
ISIN: DK0010272202
WKN:
End of Announcement DGAP News-Service
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