Celgene has ventured into the cancer stem cell therapy arena via a major deal with OncoMed, under which the firms will jointly develop and commercialise up to six anti-cancer stem cell (CSC) product candidates from the latter's pipeline.

The firm will pay OncoMed an upfront fee of $155 million, plus a $22.25 million equity investment, in return for global co-development, co-commercialisation and profit-sharing rights to the candidates.

OncoMed, which saw its stock more than double during trading yesterday after news of the deal emerged, will undertake initial clinical studies on five of the drugs, with Celgene having the option to bag global licences for them.  

Celgene also has an option to license OncoMed's flagship candidate demcizumab - which is currently in early development for non-small cell lung and pancreatic cancers - during or after mid-stage trials.

If the drug's development is successful, OncoMed stands to receive milestone payments of up to around $790 million, including an undisclosed payment for achieving pre-determined safety criteria in Phase II clinical trials. 

For the anti-DLL4/VEGF bispecific antibody, option exercise, development, regulatory and commercial payments could total up to $505 million, while for the other four biologics, each program is eligible for around $440 million, the firms said.

Explaining the strategy behind the move, OncoMed's chairman and chief executive Paul Hastings said it gives the firm "substantial resources that will enable us to continue to discover and develop new therapeutics independently while positioning OncoMed for substantial potential downstream value and profits".

From the other side of the fence, Tom Daniel, President, Global Research & Early Development, of Celgene, said "demcizumab's substantial early clinical activity warrants aggressive yet careful evaluation in several indications where we have strength," while the others "provide us complementary and strategically valuable targeting opportunities across both biologic and small molecule modalities in the cancer stem cell arena".