* OncoMed to get upfront payments of $177.25 mln
* Celgene to take 5 pct stake in OncoMed
* Celgene stock down 1.4 pct (Adds CEO, analyst comments, details on deal; updates shareprice)
Dec 3 (Reuters) - Shares of OncoMed Pharmaceuticals Inc more than doubled on Tuesday after the biotechnologycompany said Celgene Corp would help it develop andmarket six of its experimental anti-cancer stem cell drugs.
OncoMed will get upfront payments of $177.25 million,including $22.25 million for new stock that would give Celgene astake of about 5 percent, the companies said.
The deal gives Celgene an entry into the market fortreatments targeting cancer stem cells.
Cancer stem cells play a significant role in theestablishment, spread and recurrence of cancer.
OncoMed said it would conduct the initial clinical studieson five of the drugs, giving Celgene the option to license thembased on the trial results.
Celgene will also get an option to license OncoMed's mostadvanced clinical candidate, demcizumab, during or after thecompletion of certain mid-stage trials.
The drug is in early-stage development in combination withstandard-of-care therapy for non-small cell lung cancer andpancreatic cancer.
OncoMed, based in Redwood City, California, is eligible toreceive up to $790 million in development, regulatory andcommercial milestones for demcizumab.
"Demcizumab's substantial early clinical activity warrantsaggressive yet careful evaluation in several indications wherewe have strength", said Tom Daniel, Celgene's president ofglobal research and early development.
OncoMed is eligible to get up to $3 billion in milestonepayments if Celgene exercises all its options and all six drugsare approved.
The potential monetary benefits of the deal with Celgenecould take all six drugs through to commercialization, OncoMedChief Executive Paul Hastings told Reuters.
OncoMed already has agreements with GlaxoSmithKline Plc and Bayer AG to develop and marketother anti-cancer stem cell therapies.
OncoMed's stock was up 105 percent at $28.75 in afternoontrading on the Nasdaq. Up to Monday's close, the company's stockhad halved in value since it went public in July.
Summit, New Jersey-based Celgene will pay $15.13 per sharefor its stake in OncoMed. OncoMed's stock closed at $14 onMonday, valuing the company at about $390 million.
Celgene shares were down 1.4 percent at $160.76. (Reporting by Natalie Grover in Bangalore; Editing by SavioD'Souza)