Friday, July 7, 2017

Ancillary Merck Biz Dev Updates Dept.: Kenilworth's Stake In BeiGene Became 38% More Valuable -- In One Day...

We last looked in on Merck's very fortuitous investment in, and relationship with BeiGene in March of 2017. [More background here -- on what was originally a $10 million investment by Kenilworth -- now worth high hundreds of millions, including money already taken off the table.]

On Wednesday (while I was busily writing on the Martin Shkreli felonies prosecution in Brooklyn), Celgene did a multi-part, multi-asset deal with BeiGene, related to BeiGene's PD-1 candidate (and related Asian hard assets). Do go read the link below for all the details, but BeiGene stock popped about 38 per cent on the news, over the last two sessions -- nicely increasing the value of Merck's nearly seven per cent stake in the Chinese newly public company.

The price Celgene actually paid for the stock is hard to determine, since part of that price was the transfer of Celgene's China facilities and business operations. So we cannot compare Merck's stake directly to the cash recited in exchange for Celgene's six per cent of BeiGene. But I guarantee that Mr. Frazier is smiling about his investment, now.

The bite, from Xconomy New York, then:

. . . .The deal announced late Wednesday calls for Celgene to pay $263 million up front in licensing fees for global rights to BeiGene’s lead cancer drug in solid tumors. BeiGene keeps the right to develop and commercialize the drug in Asia, except for Japan, whose rights go to Celgene. If Celgene succeeds in developing the drug and commercializing it, the company could owe BeiGene as much as $980 million in milestone payments.

The transaction also includes equity. While Celgene has agreed to pay $150 million for a 5.9 percent ownership stake in its partner, BeiGene will take over Celgene’s China operations. The deal also grants BeiGene rights to manage the sales and marketing of three Celgene cancer drugs that are already approved in China.

The centerpiece of the deal is BeiGene’s lead compound, BGB-A317. The antibody drug is in a class of cancer treatments called checkpoint inhibitors. These drugs block the PD-1 protein, which some cancers can use to avoid detection by the body’s immune system. BeiGene developed its drug for targeting solid tumors as well as blood-borne cancers. . . .

Have an excellent weekend, one and all -- do go enjoy your celebrations -- as my biggest boy (and lil'est baby-girl) are having a special weekend, too. . . . smile.


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