Policy & Regulation
ImmunoGen Sells Residual Kadcyla Royalties; Will Receive USD 65m Payment
10 January 2019 - - US-based antibody-drug conjugates developer ImmunoGen, Inc. (NASDAQ: IMGN) has sold its residual rights to receive royalty payments on commercial sales of Kadcyla (ado-trastuzumab emtansine) to OMERS, the defined benefit pension plan for municipal employees in the Province of Ontario, Canada, for USD 65m, the company said.

This transaction entails the sale of the residual interest held by ImmunoGen from a prior transaction with Immunity Royalty Holdings, L.P.

In 2015, ImmunoGen announced a USD 200m non-dilutive royalty transaction through which ImmunoGen sold the right to receive 100% of the royalty revenue on Kadcyla commercial sales to an undisclosed threshold amount, subject to certain conditions.

Once the applicable threshold was met, ImmunoGen would receive 85% of the Kadcyla royalty revenue and the original purchaser would receive 15% for the remaining term of the royalty.

With this transaction, OMERS now owns 100% of ImmunoGen's rights to receive Kadcyla royalties.

MTS Health Partners, L.P. acted as exclusive financial advisor to ImmunoGen and Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. acted as special transactional counsel to ImmunoGen.

Genentech, a member of the Roche Group, developed Kadcyla (ado-trastuzumab emtansine) using ADC technology licensed from ImmunoGen under a 2000 agreement established between the companies.

This agreement entitles ImmunoGen to receive royalties ranging from 3-5% on Kadcyla sales in countries where ImmunoGen holds valid patents covering Kadcyla, and 2% in countries without relevant ImmunoGen patents.

ImmunoGen is entitled to receive royalties on commercial Kadcyla sales in each country for ten years after the launch of Kadcyla in that country.

This period extends to twelve years for each country in which ImmunoGen has valid claims in relevant patents on the tenth anniversary of the commercial launch of Kadcyla in that country.

Founded in 1962, OMERS is one of Canada's largest defined benefit pension plans, with more than USD 95bn in net assets, as at December 31, 2017.

It invests and administers pensions for almost half a million members from municipalities, school boards, emergency services, and local agencies across Ontario.

OMERS has employees in Toronto and other major cities across North America, the UK, Europe, Asia, and Australia originating and managing a diversified portfolio of investments in public markets, private equity, infrastructure, and real estate.

ImmunoGen is developing the next generation of antibody-drug conjugates to improve outcomes for cancer patients.

Its lead product candidate, mirvetuximab soravtansine, is in Phase 3 study for folate receptor alpha -positive platinum-resistant ovarian cancer, and in Phase 1b/2 testing in combination regimens.

The company's novel IGN candidates for hematologic malignancies, IMGN779 and IMGN632, are in Phase 1 studies.