Strategic Collaborations

Therapeutic Collaborations

Epizyme® has entered into strategic collaborations for several of our therapeutic programs. These collaborations are important elements of our strategy to build a leading, independent biopharmaceutical company. We believe that our collaborations contribute to our ability to rapidly advance our therapeutic product candidates, build our product platform and concurrently progress a wide range of discovery and development programs. Our therapeutic collaborations have provided us with approximately $178 million in non-equity funding. Additionally, our therapeutic collaborations provide us with research funding and the potential for more than $1 billion of research, development, regulatory, and sales-based milestone payments, as well as royalties or profit sharing on any net product sales. We have retained commercialization or co-commercialization rights in the United States for the programs in our Celgene and Eisai collaborations.


In April 2012, we entered into a collaboration and license agreement with Celgene under which we granted Celgene an exclusive license to our DOT1L program outside the United States, including EPZ-5676, the therapeutic candidate now in clinical development. We also granted Celgene the option to license rights outside the United States for other HMT programs, excluding HMT targets covered by our two other existing therapeutic collaborations. We are eligible to receive royalties on net product sales outside of the United States.

Under the terms of the agreement, we received a $65.0 million upfront payment and $25.0 million from the sale of our series C preferred stock to an affiliate of Celgene. In addition, we earned a $25.0 million milestone payment for achieving proof of concept in the EPZ-5676 clinical program, received $2.3 million of research co-funding, and are eligible to earn up to $135.0 million in additional development and regulatory milestone payments related to DOT1L and up to $165.0 million in option exercise fees and development and regulatory milestone payments related to each additional target as to which Celgene exercises its option during an initial option period ending in July 2015. Celgene has the right to extend the option period until July 2016 by making a significant option extension payment. As to DOT1L and each available target as to which Celgene exercises its option, we are eligible to receive royalties for each target at defined percentages ranging from the mid-single digits to the mid-teens on net product sales outside of the United States subject to reduction in specified circumstances.


In April 2011, we entered into a collaboration and license agreement with Eisai under which we granted Eisai an exclusive worldwide license to our EZH2 program, including EPZ-6438, while retaining an opt-in right to co-develop, co-commercialize and share profits with Eisai as to licensed products in the United States.

Under the terms of the agreement, we received a $3.0 million upfront payment. In addition, we have received $19.2 million in research funding payments, earned $13.0 million in milestone payments, and are eligible to receive up to $195.0 million in additional milestone payments, comprising aggregate development and regulatory milestone payments of up to $80.0 million and sales-based milestone payments of up to $115.0 million. We are also eligible to receive royalties on any net product sales.

Eisai solely funds all research, development and commercialization costs for licensed compounds. If we exercise our opt-in right to co-develop, co-commercialize, and share profits with Eisai, we are required to share ongoing U.S. development costs with Eisai, Eisai is entitled to recover a portion of past development costs as a partial reduction of future milestone payments and royalties paid to Epizyme, and the milestone payments we are eligible to receive in the future are reduced.


In January 2011, we entered into a collaboration and license agreement with GSK to discover, develop and commercialize novel small molecule HMT inhibitors directed to three targets from our product platform.

Under the agreement, we received an upfront payment of $20.0 million. In addition, we have received a $3.0 million payment upon the execution of an agreement amendment, $6.0 million of fixed research funding, $3.6 million in research funding payments and $15.0 million in milestone payments and are eligible to receive up to $620.0 million in additional milestone payments, comprising aggregate research, development and regulatory milestone payments of up to $402.0 million and sales-based milestone payments of up to $218.0 million. In addition, GSK is required to pay us royalties on worldwide net product sales.


Companion Diagnostic Collaborations

In collaboration with established diagnostic companies, we are developing companion diagnostics to identify patients who have the specific genetically defined cancer targeted by each of our therapeutic product candidates.


In December 2012, together with Eisai, we entered into an agreement with Roche Molecular Systems, Inc., to develop and to commercialize a companion diagnostic for use with our EPZ-6438 therapeutic product candidate. The development costs under the agreement with Roche will be the responsibility of Eisai until such time as we may exercise our opt-in right under the collaboration with Eisai. If we exercise our opt-in right under the Eisai agreement, the costs under the Roche agreement will be shared by us and Eisai as determined under the profit share and co-commercialization components of the Eisai collaboration agreement.


In February 2013, we entered into an agreement with Abbott under which we agreed to fund Abbott’s development of a companion diagnostic to identify patients with the MLL-r genetic alteration targeted by EPZ-5676.

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