Medigene in for up to $1.5 billion under broader pact with Bluebird Bio

[May 14, 2018] By Ludwig Burger

FRANKFURT (Reuters) - German biotech firm Medigene has secured a wider remit under a collaboration with U.S. peer Bluebird Bio on a technology that boosts the immune response to cancer, increasing the pool of potential milestone payments to $1.5 billion.

The number of projects in the alliance, which has Medigene contributing screening tools to identify promising T-cell receptors (TCR), will rise from four to six, Medigene said in a statement on Monday, sending its shares 8 percent higher.

"If successfully developed and marketed through several indications and markets, Medigene could receive up to $250 million in milestone payments per TCR program in addition to tiered royalty payments on net sales up to a double-digit percentage," Medigene said.

Medigene agreed its alliance with Bluebird in September 2016, working on modified T cells, one of the immune system's main weapons, to better target specific tumor cells.

The extended collaboration contract validates Medigene's technology platform, analysts at Baader Helvea said, confirming their "buy" recommendation.

Bluebird is best known for its progress in a class of customized cancer drugs known as chimeric antigen receptor T-cells, or CAR-Ts.

Other companies working on T cell receptor (TCR) technologies include GlaxoSmithKline, Britain's Immunocore, which is backed by the Bill & Melinda Gates Foundation, or U.S. biotech group ImmunoCellular.

As part of the broadened contract, Medigene will receive an additional one-time payment of $8 million plus increased research and development funding.

(Reporting by Ludwig Burger; Editing by John Stonestreet and Maria Sheahan)

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