GlaxoSmithKline (GSK) and Genmab A/S (CSE: GEN) has announced a worldwide agreement to co-develop and commercialise HuMax-CD20 (ofatumumab), a fully human monoclonal antibody in late stage development for CD20 positive B-cell chronic lymphocytic leukaemia (B-CLL) and follicular non-Hodgkin's lymphoma (NHL) and in phase II for rheumatoid arthritis (RA).

Under the terms of the agreement, Genmab will receive a license fee of DKK 582 million and GSK will invest DKK 2,033 million (approximately £ 183 million and approximately $357 million) to purchase, 4,471,202 ordinary shares of Genmab. The total potential value of this agreement, in the event of full commercial success, in cancer and various autoimmune and inflammatory diseases, could exceed DKK 12.0 billion, including the initial license fee and equity purchase, milestone payments, totalling DKK 9.0 billion and expected development, commercial manufacturing and commercialisation costs.

In addition, Genmab will be entitled to receive tiered double-digit royalties on global sales of HuMax-CD20.

GSK will receive an exclusive worldwide license to HuMax-CD20 as well as any other antibodies with affinity for the CD20 antigen, which Genmab may develop. GSK will also have an exclusive option to a CD20 UniBody to be developed in collaboration with Genmab. GSK and Genmab will co-develop HuMax-CD20.

Genmab will be responsible for development costs until 2008, including costs of the two ongoing late stage oncology studies after which development costs will be shared equally between GSK and Genmab. GSK will be solely responsible for the manufacturing and commercialisation of HuMax-CD20.

Genmab will have an option to co-promote HuMax-CD20 in a targeted oncology setting in the US and in the Nordic region. Should this be undertaken, Genmab will also have the option co-promote Bexxar and Arranon in the US and Atriance in the relevant countries of the Nordic region.

The agreement is subject to review by the US Government under the Hart-Scott-Rodino Act and will become effective after clearing review.

Dr. Moncef Slaoui, chairman of research and development, GSK, commented, "We believe that this alliance is a significant step for GSK and Genmab. By combining the skills and knowledge of Genmab in developing fully human antibodies, such as HuMax-CD20, and the substantial experience of GSK in clinical and commercial development, we hope to be able to bring this innovative and potentially valuable medicine to patients as soon as possible."

"This alliance puts the tremendous strength of GSK's development, sales and marketing expertise behind HuMax-CD20," said Lisa N. Drakeman, PhD, chief executive officer of Genmab. "We are looking forward to our collaboration and working together to maximize the value of this product that has the potential to benefit so many patients with different diseases."