OncoMed Pharmaceuticals Inc., a drug developer that first sold shares to the public in July, almost doubled in trading after signing a $177.25 million agreement with Celgene Corp. on as many as six potential cancer medicines.
OncoMed rose 98 percent to $27.70 at the close in New York in the biggest one-day rise since the company’s initial public offering. The shares of the Redwood City, California-based company have gained 63 percent since the IPO.
The deal includes a $22.25 million equity investment and additional payments tied to development and sales goals which may total more than $3 billion, the companies said today in a statement. OncoMed, whose drugs target cancer stem cells, will oversee early clinical studies, and Summit, New Jersey-based Celgene will then have the option to license worldwide rights to the compounds.
Celgene, the world’s fourth-largest biotechnology company, gets an exclusive option on OncoMed’s demcizumab, which is in early stage studies in diseases including pancreatic cancer. Celgene shares, which have doubled this year, declined 2 percent to $159.93.
OncoMed was advised by Latham & Watkins LLP and Leerink Swann LLC. The company also has partnerships with Bayer AG and GlaxoSmithKline Plc.