Bayer AG (BAYN) will use Seattle Genetics Inc. (SGEN)s armed antibody anti-cancer technology, seeking a foothold in a new class of drugs designed to be more effective and less destructive by ferrying chemotherapy straight into tumor cells.

Bayer agreed to pay Seattle Genetics up-front fees of as much as $20 million, plus about $500 million in development and commercialization milestones and royalties on any products that emerge from the collaboration, the Leverkusen, Germany-based drug and chemical maker said in a statement today.

The deal adds Bayer as a pharmaceutical user of Seattle Genetics processes for creating new targeted cancer drugs known as antibody-drug conjugates. The technology is a focal point for Bayer, Andreas Busch, head of the companys global drug discovery, said in the statement.

We are looking forward to strengthening our portfolio, Busch said.

Bayer rose as much as 1.3 percent to 79.13 euros and was trading up 1.2 percent at 11:49 a.m. in Frankfurt. The stock has gained 10 percent this year.

Seattle Genetics, based in Bothell, Washington, sells its own targeted cancer drug, Adcetris. GlaxoSmithKline Plc (GSK), Pfizer Inc. (PFE) and Roche Holding AG (ROG) are among its customers.

Roche won approval in February for its own antibody-drug conjugate, breast cancer therapy T-DM1. Cowen & Co. investment bank estimated at the time that the medicine, sold under the name Kadcyla, could be one of the biggest biotech drugs and generate sales of more than $5 billion.

Roche, based in Basel, Switzerland, used an antibody-drug conjugate technology from ImmunoGen Inc. (IMGN) for its breast cancer drug. ImmunoGen, which has its headquarters in Waltham, Massachusetts, also has partnerships with Sanofi (SAN) and Amgen Inc. (AMGN)

To contact the reporter on this story: Naomi Kresge in Berlin at nkresge@bloomberg.net

To contact the editor responsible for this story: Phil Serafino at pserafino@bloomberg.net

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Bayer to Use Seattle Genetics Armed-Antibody Technology

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