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ImmunoGen Monetizes Kadcyla Royalty

Industry: Life Sciences

Key Facts

  • ImmunoGen, a long-time client of Mintz, is a biotechnology company that develops targeted anticancer therapeutics
  • Mintz represented ImmunoGen in a $200 million non-dilutive transaction with funds managed by TPG Special Situation Partners
  • Richard Gervase was named “Dealmaker of the Year” by Finance Monthly magazine for his work on this transaction

The Situation

ImmunoGen, a public company trading under the symbol IMGN, sought to increase its cash and cash equivalents in order to invest in implementing strong clinical development programs for promising product candidates. The company determined that its royalty stream from Kadcyla had potential for monetization.

Genentech, a member of the Roche Group, developed Kadcyla (ado-trastuzumab emtansine) using ADC technology licensed from ImmunoGen. The 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.

The Approach

ImmunoGen sought to generate the liquid assets without the dilutive effect of a stock offering. The company also wanted to realize significant value from the substantial sales development of Kadcyla, a drug candidate with potentially high long-term value. Mintz helped the company develop and negotiate the transaction structure to achieve its goals.

The Outcome

The transaction yielded net proceeds to ImmunoGen of $194 million in the short term. The deal calls for TPG Special Situations Partners (“TSSP”) to receive 100% of the royalty revenue on Kadcyla® commercial sales that would otherwise be paid by Roche to ImmunoGen until TSSP has received a total of either $235 million or $260 million, depending on timing. After this threshold is met, if ever, ImmunoGen will receive 85% of the Kadcyla royalty revenue and TSSP will receive 15% of the Kadcyla royalty revenue until this revenue stream ends.

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