Genmab Recalibrates: Strategic Partnerships, Cost-Cutting

| About: Genmab A/S (GNMSF)

By Michael Fitzhugh

Genmab’s (OTC:GNMSF) new CEO, Jan G.J. van de Winkel, is looking to reshape the Danish biotech’s strategy with an emphasis on further cost-cutting and new partnerships. A new research collaboration with Seattle Genetics (NASDAQ:SGEN) will give Genmab access to technology to support the development of an early-stage cancer drug, while a renegotiation of its long-running partnership with GlaxoSmithKline (NYSE:GSK) has boosted Genmab’s financial security and reduced funding concerns for years, says van de Winkel.

Genmab also plans to slow its cash burn rate with plans to slash operating expenses by 20 percent in 2011 and a plan to turn its Utrecht, Netherlands research facility into a profit center through strategic partnerships leveraging its research capabilities and preclinical pipeline.

Investors had “expressed concerns over Genmab’s cash position, our ability to sell (our U.S.) manufacturing facility and the potential needs to issue shares to raise cash,” van de Winkel acknowledged during a July conference call.

With GSK taking full responsibility for the development of ofatumumab in autoimmune indications, such as rheumatoid arthritis, Genmab costs on that front ended, he said.

Developing ofatumumab for oncology indications remains a top priority for Genmab, van de Winkel says. With GSK, it recently secured approval to market the drug in the European Union as Arzerra for leukemia. And in a mid-stage clinical trial, the drug showed encouraging results for the treatment of relapsing-remitting multiple sclerosis.

Zalutumumab, Genmab's second most-advanced drug candidate, is its other top priority. Genmab is running several mid-stage and late-stage trials of the head and neck cancer medicine.

Genmab is also eager to find ways to “advance and validate” next-generation technologies like bispecific antibody technology, artificial proteins with applications in cancer immunotherapy, something the company hopes to accomplish through “business models that require limited capital investment by Genmab while retaining optimal access and upside,” it says.