Celgene Enters PD1 Market with BeiGene Deal

It's a good day for BeiGene Ltd. (BGNE)  whose stock soared nearly 25% to $65.02 on Thursday, July 6, following announcement of their new cancer collaboration with Celgene Corp.

Celgene (CELG) is shelling out $263 million cold hard cash along with a $150 million equity stake and up to $980 million in other payments and royalties for a 5.9% stake of BeiGene shares: that's pricing Beigene at $59.55 a share. The strategic immuno-oncology collaboration will propel Celgene into the PD-1 market with its acquisition of worldwide rights to BeiGene's PD-1 checkpoint inhibitor, BGB-A317.

In return, BeiGeine will gain rights to Celgene's China-based operations, which will further efforts for Celgene's budding oncology portfolio.

With five therapies on the market, Celgene's checkpoint will join the ranks of checkpoint leaders Merck & Co. (MCK) and Bristol-Myers Squibb (BMY) along with emerging contenders Roche Holding AG (ROG) , Pfizer Inc. (PFE) , and AstraZeneca (AZN) . All five leaders were down during mid-morning trading. 

According to a report from research analyst Alethia Young of Credit Suisse, a PARP inhibitor may be on the horizon for Celgene.

"From speaking to Celgene it sounds like they do expect to start combination studies but are discussing specific plans there," wrote Young. "Of course Tesaro and Clovis remain options with PARP inhibitors if Celgene is interested in one. Tesaro has PARP and PD-1 programs along with other antibodies in house. With the announcement of the PD-1 only, perhaps Clovis would make more sense for Celgene since they have a fully unpartnered PARP."

Neither Celgene nor BeiGene were unavailable for immediate comment. 

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