Two Washington-state based companies, Seattle Genetics and Cascadian Therapeutics (previously named Oncothyreon), a clinical-stage biopharmaceutical company dedicated to developing innovative product candidates for the treatment of cancer, have agreed on a definitive merger under which Seattle Genetics has agreed to acquire Cascadian Therapeutics.

With the acquisition Seattle Genetics adds a late-stage breast cancer program to its own oncology pipeline of industry-leading antibody-drug conjugate (ADC) technology designed to harnesses the targeting ability of antibodies to deliver cell-killing agents directly to cancer cells. The acquisition provides Seattle Genetics with global rights to a pivotal phase II program in the development for HER2+ metastatic breast cancer with a potential rapid registration pathway.

Under the terms of the agreement, Seattle Genetics will pay $10.00 per share in cash, or approximately $614 million. The transaction was unanimously approved by the Boards of Directors of both companies.

Small molecule tyrosine kinase inhibitor
Cascadian Therapeutics’ most advanced program is tucatinib also known as ONT-380 and ARRY-380, an investigational orally active, reversable small molecule tyrosine kinase inhibitor (TKI) that is highly selective for HER2, a growth factor receptor that is overexpressed in multiple cancers, including breast, colorectal, ovarian and gastric.

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The investigational agent was invented by Array BioPharma and licensed to Cascadian Therapeutics for development, manufacturing and commercialization.

Tucatinib is currently being evaluated in a randomized global pivotal trial called HER2CLIMB for patients with HER2-positive (HER2+) metastatic breast cancer, including patients with or without brain metastases.  The investigational agent has been evaluated as a single agent and in combination with both chemotherapy and other HER2-directed agents including trastuzumab (Herceptin®; Genentech/Roche) and trastuzumab emtansine (Kadcyla®; Genentech/Roche).[1][2]

Results from phase Ib trials showed that the combination of tucatinib, capecitabine and trastuzumab was generally well-tolerated and demonstrated clinical activity in patients with and without brain metastases. The data support the ongoing pivotal trial and the potential role of tucatinib in earlier lines of metastatic breast cancer.

Tucatinib Clinical trials
Trial DataTrial Name
Program: Tucatinib (ARRY-380 /ONT-380)
Phase: Ib
Status: Active, not recruiting
Disease: Brain metastases from HER2+ breast cancer
Sponsor: Dana-Farber Cancer Institute
Trial Information: NCT01921335
Phase I Dose-escalation Trial of ARRY-380 in Combination With Trastuzumab in Participants With Brain Metastases From HER2+ Breast Cancer
Program: Tucatinib (ARRY-380 /ONT-380)
Phase: Ib
Status: Active, not recruiting
Disease: HER2+ breast cancers
Sponsor: Oncothyreon
Trial Information: NCT02025192
A Phase 1b Study of ONT-380 Combined With Capecitabine and/or Trastuzumab in Patients With HER2+ Metastatic Breast Cancer
Program: Tucatinib (ARRY-380 /ONT-380)
Phase: Ib
Status: Active, not recruiting
Disease: HER2+ breast cancers
Sponsor: Oncothyreon
Trial Information: NCT01983501
A Phase 1b Study of ONT-380 Combined With Ado-trastuzumab Emtansine (T-DM1) in Patients With HER2+ Breast Cancer

In December 2017, the first patient was enrolled in the investigator-initiated Phase Ib/II trial known as TULiP that is evaluating tucatinib in combination with an aromatase inhibitor and CDK4/6 agent for patients with hormone receptor-positive and HER2-positive (HR+/HER2+) metastatic breast cancer. Based on the activity of tucatinib in combination with multiple agents in patients with brain metastases observed in prior studies, the trial will also include these patients.

Cascadian Therapeutics’ is also developing a Chk1 kinase inhibitor and an antibody against an immuno-oncology target known as TIGIT, both of which are currently in preclinical development.

Photo 1.0: Clay Siegall, Ph.D., President and Chief Executive Officer of Seattle Genetics.

Best in class
“This acquisition would enhance our late-stage clinical pipeline with a potentially best-in-class, orally available and highly selective TKI for patients with HER2-positive metastatic breast cancer,” said Clay Siegall, Ph.D., President and Chief Executive Officer of Seattle Genetics.

“Tucatinib would complement our existing pipeline of targeted cancer therapies, provide a third late-stage opportunity for a commercial product in solid tumors and expand our global efforts in breast cancer. It also leverages our broad expertise and resources to advance and expand the tucatinib program for patients. Beyond breast cancer, we believe there may be opportunities for tucatinib in other tumor types, such as HER2-positive metastatic colorectal cancer. Cascadian’s pipeline also includes a preclinical immuno-oncology agent. We look forward to welcoming the team at Cascadian Therapeutics and continuing the momentum of the tucatinib development program,” Siegall added.

“This agreement represents a very positive outcome for patients with HER2-expressing cancers, our employees and for our stockholders,” said Scott D. Myers, President and Chief Executive Officer of Cascadian Therapeutics.

“Seattle Genetics has the development and commercial capabilities and the resources needed to more fully realize the potential of tucatinib as a new best-in-class treatment option for metastatic breast cancer, colorectal cancer and potentially for other indications,” Myers concluded.

The Small print
Under the terms of the definitive merger agreement, Seattle Genetics will commence a tender offer on or about February 8, 2018 to acquire all of the outstanding shares of common stock of Cascadian Therapeutics for $10 per share in cash. This represents a 69% premium to the closing price of Cascadian Therapeutics’ common stock on Tuesday, January 30, 2018, and a 139 percent premium to its 30-day volume weighted average stock price. The tender offer is subject to customary closing conditions, including the tender of at least a majority of the outstanding shares of Cascadian Therapeutics common stock (on a fully diluted basis) and the expiration or early termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976. Following the closing of the tender offer, a wholly-owned subsidiary of Seattle Genetics will merge with and into Cascadian Therapeutics, with each share of Cascadian Therapeutics common stock that has not been tendered being converted into the right to receive the same $10 per share in cash offered in the tender offer. The transaction is anticipated to close in the first quarter of 2018.

In connection with the transaction, Seattle Genetics has secured a financing commitment in the amount of $400 million from Barclays and JPMorgan-Chase Bank. The balance of the consideration will be provided from cash on hand.

Leerink Partners is acting as lead financial advisor to Seattle Genetics. Barclays and J.P. Morgan Securities are also acting as financial advisors on the transaction. Perella Weinberg Partners is acting as financial advisor to Cascadian Therapeutics. Legal counsel for Seattle Genetics is Sullivan & Cromwell and legal counsel for Cascadian Therapeutics is Reed Smith. Goodwin Procter acted as special counsel for the Cascadian Therapeutics Board of Directors and Board transaction committee.