Regeneron To Make $100M bluebird bio Investment In Cancer Research Collaboration

Bluebird bio Inc (NASDAQ: BLUE) shares were moving to the upside Monday after the announcement of a collaboration with Regeneron Pharmaceuticals Inc (NASDAQ: REGN) in a bid to develop cell therapies for cancer.

At last check, bluebird bio shares were rallying 2.7 percent to $154.05, while Regeneron stock was edging down modestly to $393.64.

What Happened

Regeneron and bluebird announced a collaboration to leverage their respective platforms to develop novel immune cell therapies for cancer.

Immunotherapy uses the power of one's own immune system to combat cancer.

Regeneron said it will lend its VelociSuite platform technologies for discovering and characterizing fully human antibodies as well as T-cell receptors directed against tumor-specific proteins and peptides.

At the same time, bluebird will contribute its expertise in gene transfer and cell therapy, the companies said.

Why It's Important

The synergies between the technologies of both companies create a promising opportunity to develop innovative cancer treatments, according to George Yanocopoulos, Regeneron's president and chief scientific officer. 

Per the agreement, Regeneron will make a $100-million investment in bluebird bio at a price of $238.10 per share. The 59-percent premium over bluebird's Friday closing price is to account for Regeneron's initial 50-percent funding obligation for basic collaboration research.

Subsequently, the companies said they will equally fund ongoing research.

What's Next

Both companies have screened out six initial product candidates and plan to equally share the R&D expenses up to the point of an IND submission. Once an IND is submitted, Regeneron is vested with the option to opt into a "co-development/co-commercialization arrangement for certain collaboration targets, with 50/50 cost and profit-sharing."

If Regeneron does not use this option, it stands to receive milestone payments and royalties from bluebird on any potential products.

"Additional targets may be selected over the five-year research collaboration term," the companies said.

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