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Partnership could be worth $1b to Forma

Watertown biotech, Celgene team up on drugs for cancer, neurodegenerative ills

Forma Therapeutics, a Watertown biotechnology company established in 2008 to deploy powerful new screening tools for developing drugs, is expected to say Monday that it will collaborate with New Jersey-based Celgene Corp. on making drugs that regulate the level of proteins in cells. The treatments would be used to fight cancers and neurodegenerative disorders.

If the companies succeed in getting those medicines on the market, the partnership could generate more than $1 billion in milestone payments to Forma. Such payments, tied to meeting regulatory and sales targets, have become an increasingly common part of life sciences deals between large drug companies and smaller biotechs.

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Under the alliance, Celgene will fund early-stage research by Forma and its partner, TGen Drug Development of Scottsdale, Ariz., in the emerging field of protein homeostasis, which seeks to prevent or kill tumors by controlling how proteins are degraded in cells. Celgene will make an upfront payment and development milestone payments of as much as $200 million if Forma and TGen can bring an undisclosed number of experimental drugs to clinical trial.

Forma, which is backed by venture capital firms in the US and Asia, then would be eligible for between $315 million and $430 million in milestone payments for each experimental drug that meets regulatory targets, is approved by regulators, and achieves specific sales targets.

The deal is the largest yet for Forma, whose biological and computational technology has drawn interest from multiple partners.

Forma, with 110 employees in Watertown and Branford, Conn., has used its discovery tools to screen about 30 experimental drugs a year, a scale akin to that of many large drug companies.

It previously struck partnerships with Genentech Inc., Johnson & Johnson, Germany’s Boehringer Ingelheim GmbH, and Cubist Pharmaceuticals Inc. of Lexington.

Forma’s arrangement with Celgene will allow the company to add 15 to 20 jobs and represents “a new area of biology that we’ve just started in on,” said chief executive Steven Tregay. “It’s the first time we’ve taken the lead in development. Our intent is to advance numerous programs into the clinic.”

Tregay said that Forma is devoting roughly half of its resources to building its own pipeline of drugs, while the other half is being allocated to working with strategic partners.

In the Celgene deal, he said, Forma will retain the right to market any approved drugs domestically but give Celgene the rights to sell the treatments outside the United States.

Robert Weisman can be reached at weisman@globe.com. Follow him on Twitter @GlobeRobW.
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