Celldex (CLDX) to Acquire Kolltan Pharmaceuticals in ~$235M Deal
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Celldex Therapeutics, Inc. (Nasdaq: CLDX) announced that the Company has entered into a definitive agreement to acquire Kolltan Pharmaceuticals, Inc., a privately held clinical-stage company focused on the discovery and development of novel, antibody-based drugs targeting receptor tyrosine kinases (RTKs). Focused primarily in oncology and backed by prominent thought leaders in RTK biology, Kolltan has reported clinical and preclinical data that its drug candidates can help overcome tumor resistance mechanisms associated with current tyrosine kinase inhibitors and seen in patients who have failed other cancer therapies. Celldex believes Kolltan’s clinical candidates and preclinical platform are highly compatible with the Company’s scientific approach and can be developed independently and in combination with Celldex’s existing product candidates.
“Celldex is committed to driving innovation in oncology to meet the needs of patients and their families,” said Anthony Marucci, Co-founder, President and Chief Executive Officer of Celldex Therapeutics. “The acquisition of Kolltan provides Celldex with a truly unique platform of antibodies targeting receptor tyrosine kinases which we believe are highly compatible with our pipeline. We believe this acquisition complements our leadership position in immuno-oncology and enhances our ability to develop targeted therapeutic regimens to dramatically improve patient outcomes.”
“Kolltan’s programs targeting KIT, ErbB3 and TAM receptors potentially address major challenges surrounding tumor resistance mechanisms in cancer biology,” said Gerald McMahon, Ph.D., President and Chief Executive Officer of Kolltan Pharmaceuticals. “Celldex’s leadership and their scientific team played an instrumental role in building the antibody field during their tenure at Medarex and used this expertise to create a leading pipeline in immuno-oncology at Celldex. We firmly believe Celldex is uniquely positioned to advance our antibody portfolio targeting RTKs to improve outcomes for patients and create optimal value for our shareholders.”
Kolltan’s portfolio includes:
- KTN0158 – a humanized monoclonal antibody that is a potent inhibitor of KIT activation in tumor cells and mast cells; currently in a Phase 1 dose escalation study in refractory gastrointestinal stromal tumors (GIST). KTN0158 prevents KIT activation by blocking receptor dimerization. This mechanism may be effective even in tumors harboring the most common resistant mutations to Gleevec® and is unlikely to drive resistance. Preclinical data demonstrate that KIT inhibition in certain immune cells with KTN0158 enhances the activity of checkpoint blockade. This mechanism may also be effective with other immunotherapies, in particular with Celldex’s CD27 agonist, varlilumab.
- KTN3379 – a human monoclonal antibody designed to block the activity of ErbB3 (HER3); clinical activity including meaningful responses and stable disease has been observed in a Phase 1b study in cetuximab (Erbitux®) refractory patients in head and neck squamous cell carcinoma and in BRAF-mutant non-small cell lung cancer (NSCLC). The proposed mechanism of action for KTN3379 sets it apart from other drugs in development in this class due to its ability to block both ligand-independent and ligand-dependent ErbB3 signaling by binding to a unique epitope. It also has a favorable pharmacologic profile, including a longer half-life relative to other drug candidates in this class. KTN3379 also has potential to work well in combination with other targeted and cytotoxic therapies to directly kill tumor cells. Tumor cell death and the ensuing release of new tumor antigens could serve as a focus for combination therapy with immuno-oncology approaches, even in refractory patients.
- A multi-faceted TAM program – a broad antibody discovery effort underway to generate antibodies that modulate the TAM family of RTKs, comprised of Tyro3, AXL and MerTK, which are expressed on tumor-infiltrating macrophages, dendritic cells and some tumors. Research supports TAMs having broad application and potential across immuno-oncology and immunology. In oncology, as with PD-1 and other checkpoints, TAMs regulate the immune response to cancer. Modulation of TAM pathways may provide additional opportunities to develop drugs to overcome resistance mechanisms, especially when used in combination with either Celldex or external product candidates or with existing approved therapies.
Upon closing of the acquisition of Kolltan, Celldex’s clinical pipeline will include seven drug candidates including therapeutic antibodies, antibody-drug conjugates (ADCs) and immune system modulators, which are being tested in a range of difficult-to-treat indications in oncology. This broad pipeline allows for novel combination approaches, several of which are already under study. In addition, Celldex would have two active preclinical programs.
Under the terms of the agreement, Celldex will acquire Kolltan in a stock-for-stock transaction, in which the upfront payment represents an equity value of approximately $62.5 million. In addition, Kolltan shareholders are eligible to receive additional payments of up to $172.5 million upon the completion of specific development, regulatory and commercial milestones. The transaction, which is subject to the receipt of Kolltan stockholder approval and other customary closing conditions, is expected to be completed by year-end. The Boards of Directors of both Celldex and Kolltan have unanimously approved the transaction, and Kolltan’s Directors have unanimously recommended that their stockholders approve the transaction. Celldex was advised by Lowenstein Sandler, LLP. Kolltan was advised by Guggenheim and Holland & Knight.
Conference Call Details
Celldex will host a conference call at 4:30 p.m. ET today to discuss the acquisition. The conference call and presentation will be webcast live over the internet and can be accessed by going to the "Events & Presentations" page under the "Investors & Media" section of the Celldex website at www.celldex.com. The call can also be accessed by dialing (866) 743-9666 (within the United States) or (760) 298-5103 (outside the United States). The passcode is 9492426.
A replay of the call will be available approximately two hours after the call concludes through November 15, 2016. To access the replay, dial (855) 859-2056 (within the United States) or (404) 537-3406 (outside the United States). The passcode is 9492426. The webcast will also be archived on the Company’s website.
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