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$61M payday: GSK exercises option for Adaptimmune's T-cell cancer therapy

GlaxoSmithKline has exercised its option to exclusively license the rights to research, develop, and commercialize one of Adaptimmune’s T-cell cancer therapy programs.

The decision triggers a $61 million payment to Adaptimmune, which will be made over the course of a transition period and includes a $38 million option payment and $18 million for the company's achieving development milestones related to the company’s NY-ESO SPEAR T-Cell therapy.

James Noble, CEO of Adaptimmune, said GlaxoSmithKline exercised its option for the NY-ESO program earlier than originally planned.

“This is a very exciting day for Adaptimmune,” Noble said. “The commitment by one of the world’s leading pharmaceutical companies to the NY-ESO SPEAR T-cell program as a new treatment modality is a testament to the strength of our data in synovial sarcoma [a rare form of soft tissue cancer which occurs primarily in the extremities of the arms or legs] recently presented at ASCO [the annual meeting of the American Society of Clinical Oncology]. From a financial perspective, this option exercise extends our cash runway into 2020.”

Adaptimmune (NASDAQ: ADAP), based in Oxfordshire, England, has it U.S. headquarters in Philadelphia, where earlier this year it opened its new $25 million campus at the Navy Yard.

The company’s NY-ESO SPEAR T-cell program is designed to boost the ability of a person’s own immune system to recognize and destroy cancer cells. SPEAR is an acronym for specific peptide enhanced affinity receptor T-cells. T-cells are subtypes of white blood cells that develop in the thymus gland and are responsible for a variety of immune system responses.

Axel Hoos, GlaxoSmithKline’s senior vice president of oncology research and development, said the company decided to exercise its option with Adaptimmune based on the ”compelling” clinical trials results for the experimental therapy in synovial sarcoma patients.

“The aim of GSK’s R&D is to develop medicines with transformational potential for patients,” Hoos said. “We will capitalize on our in-house cell and gene therapy capabilities to support the development program for [the licensed therapy from Adaptimmune], and we will continue to explore the potential for this novel cell therapy in multiple tumor types, and in combination with other cancer therapies.”

Exercising the option allows GlaxoSmithKline (NYSE: GSK) to nominate two additional targets for the therapy following completion of the transition. In addition, the successful continued development and potential subsequent commercialization of NY-ESO would trigger millions of dollars in additional payments from GlaxoSmithKline to Adaptimmune for development milestones, tiered sales milestones, and mid-single to low double-digit royalties on worldwide net sales.

Adaptimmune and GlaxoSmithKline, which is based in London and has major operations in Philadelphia and Montgomery County, signed a strategic collaboration and licensing deal in June 2014 for up to five programs, the first of which was NY-ESO. The partnership was expanded last year.

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