(Closes shares in the first and third paragraph.)
June 18 (Bloomberg) -- Cellectis shares rose 76 percent, the most ever, after Pfizer Inc. bought rights to the French company’s experimental CAR-T projects, following Novartis AG into a new area of cancer immune therapy.
Pfizer will give Cellectis $80 million upfront, plus milestone payments of as much as $185 million for each product that hits certain development and commercial targets, the drugmakers said in a statement today. New York-based Pfizer also agreed to buy about 10 percent of the French biotechnology company’s capital through newly issued shares at 9.25 euros apiece, 49 percent above yesterday’s close.
Cellectis gained the most since the stock began trading in 2007, rising to 10.94 euros in Paris, giving the company a market value of 274 million euros ($372 million).
The deal sets up a challenge between Pfizer and Novartis, the world’s two biggest drugmakers. The Swiss company is already testing a CAR-T therapy, which involves taking T cells from blood, engineering them to identify proteins on cancer cells, then putting them into the body to seek and destroy a tumor. Technology from Cellectis will simplify the delicate process of engineering those cells, Pfizer said today.
The project is “an important step toward realizing the full potential of this technology in harnessing the body’s own immune system to fight cancer,” Andre Choulika, chairman and chief executive officer of Cellectis, said in the statement.
Juno Therapeutics Inc., founded last year, is also testing drug candidates with a similar approach. The U.S. biotechnology company counts Amazon.com Inc. CEO Jeff Bezos among its investors.
“Immune oncology is a very hot segment,” Arnaud Guerin, a Nantes, France-based analyst at Portzamparc Societe de Bourse, said in a telephone interview. “Everybody wants to be here. But it’s a very risky area.”
The CAR-T technology developed by Cellectis hasn’t been tested in people yet, Guerin said, so it’s difficult to assess whether the project will be a success.
Pfizer will pay research and development costs for targets in the collaboration, and Cellectis is also eligible for tiered royalties. The Paris-based company will open a site in the U.S. to work more closely with Pfizer scientists.
CAR-T refers to Chimeric Antigen Receptor T-cell immunotherapies.