LONDON (The Deal) -- Drugs maker Pfizer (PFE - Get Report) continued its efforts to boost its portfolio following its unsuccessful, 69.4 billion pounds ($117.6 billion), takeover run on the U.K.'s AstraZeneca (AZN - Get Report) by unveiling a deal on Wednesday to take 10% of listed French biotech Cellectis and develop cancer treatments using its new partner's immunotherapy technology.
Pfizer shares have slipped about 5% since its interest in AstraZeneca first became public over the Easter weekend and both bidder and unwilling target are working overtime to convince investors of their attractive standalone prospects. Pfizer on Tuesday submitted a biologics license application to the FDA for a closely watched vaccine it is developing for meningitis, while AstraZeneca, whose revenue and earnings are declining as patents expire, last week struck a licensing deal worth up to $232.3 million with Synairgen, a London-listed biotech specializing in respiratory diseases.
The New York company said on Wednesday it will pay Cellectis $80 million upfront for exclusive rights to develop and commercialize Cellectis' chimeric antigen receptor T-cell immunotherapies to treat 15 oncology targets chosen by Pfizer.
Pfizer will also have first right of refusal on another four targets which Cellectis will choose -- the U.S. group will provide R&D funding for all 16 targets. Milestone payments to Cellectis will add as much as $185 million to the value of the deal, while the Paris company will also be eligible for unspecified royalties on sales of any products that are commercialized.
Cellectis shares surged on news of the deal with the world's second-largest drugs maker and were up 58%, at 9.79 euros, by mid-afternoon in Paris, valuing the stock at 245.5 million euros ($333.2 million). Cellectis' chimeric antigen receptor T-cell immunotherapy targets surface antigens on cells; antigens are substances that trigger the development of antibodies.
"We believe our CAR-T platform technology has the potential to offer a real advantage over other approaches to T-cell receptor engineering and this collaboration with Pfizer is an important step towards realizing the full potential of this technology in harnessing the body's own immune system to fight cancer," said Cellectis chairman and CEO Andre Choulika in a statement.
Pfizer will pay 9.25 euros per Cellectis share for the new stock that its partner plans to sell it. The share issue needs clearance from two-thirds of Cellectis shareholders' votes cast. Owners of 52.8% of the French company's voting rights have already signed up to the share sale, but if Cellectis doesn't achieve the requisite approval level Pfizer has the option to scrap the whole agreement.
Cellectis expects to open a site in the U.S. to work more closely with scientists at Pfizer.
The French company was founded in 1999 as a spinout from the Institut Pasteur and listed on the Alternext market in Paris in 2007. Choulika wasn't immediately available for further comment on the Pfizer deal.
Pfizer spokesman Dean Mastrojohn declined to elaborate on the financial information in the companies' announcement or name advisers. He called the deal a "win-win for both companies."
"For Cellectis, they now have a partner with broad global capabilities and deep oncology and immunology expertise," he said via email. "For Pfizer, we now have the opportunity to work together with a company on the cutting-edge of science in immunotherapy, whose innovative focus and scientific expertise has the potential to accelerate our efforts to continue to grow our immuno-oncology portfolio."