Not every deal has to be an acquistion, joint venture or divestiture. Celgen cut a good old fashioned licensing deal yesterday with Nogra Pharma to get its Crohn's disease asset (GED-0301). The deal is worth $710 M in an upfront payment to Nogra. The late stage property (phase III) could yield billions in annual revenue. Nogra could earn as much as $815 M more in milestones and $1.1 B in royalties should this go the home run route.
Celgene is known for its aggressive investments and R&D spending to fuel its pipeline. It missed its profitability targets yesterday in part due to the higher R&D spend. Nevertheless it has seen its stock soar by more than 35% in the past year or so and is considered one of the industries high fliers. They are putting their money where their mouth is on this one and GED-0301 has had good success in the clinic so far. If it aces phase III too, Celgene's new antisense therapy for Crohn's could be a runaway winner and well worth the risk they've taken. See Fierce Biotech.
Posted by Bruce Lehr April 25th 2014.