Advaxis, Inc. (NASDAQ: ADXS)’s Rights Sale Could Yield $475 million


Advaxis, Inc. (NASDAQ: ADXS) has decided to sell some rights to its preclinical drug candidate ADXS-NEO to Amgen, Inc. (NASDAQ: AMGN). The deal will generate $40 million upfront for Advaxis and pave the way for the company to receive up to $475 million in milestone payments.

In addition to acquiring rights to ADXS-NEO, a product that is being developed to boost the immune system of cancer patients, Amgen is also making equity investment in Advaxis. Amgen has agreed to invest $25 million in Advaxis so that it acquires a passive equity stake of about 8.9% in the company.

It seems Amgen is excited by the prospects of Advaxis’ ADXS-NEO but isn’t ready to make a premium full buyout of the company. Instead, the passive equity investment together with the rights acquisition put Amgen in a position where it can benefit from the success of ADXS-NEO. The investments should also make it easier for the company should it decide to purchase the entire of Advaxis in future.

Development and commercialization rights

The $40 million investment gives Amgen the rights to develop and commercialize ADXS-NEO. However, it is Advaxis, Inc. (NASDAQ:ADXS) that will continue to lead the clinical development of the candidate. Advaxis has also retained the manufacturing rights of the drug. The financial injection from Amgen means that Advaxis can now proceed with the development of ADXS-NEO without limitations of funds.

If Advaxis is successful in pushing ADXS-NEO through the clinical trials successfully and manages to gain regulatory clearance to bring the drug to market, it will be eligible to receive $475 million from Amgen in milestone payments.

Sales projections – Advaxis, Inc. (NASDAQ: ADXS)

Neither Advaxis, Inc. (NASDAQ: ADXS) nor Amgen has discussed their sales projections for ADXS-NEO. But some analysts believe that the drug could generate $20 million in sales in 2020, with sales ballooning to $1 billion in 2025. But it looks premature to guide sales for ADXS-NEO considering that the candidate is only in preclinical stage and there is a long runway to cover.


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