Xencor Inc (NASDAQ:XNCR) shares rose 32.06% to $16.56 on Tuesday after the company officially signed its collaboration agreement with Novartis AG (ADR) (NYSE:NVS), which has agreed to pay $150 million to have access to Xencor’s top two product candidates.
Xencor is a clinical-stage biopharmaceutical company that is focused on discovering and developing engineered monoclonal antibodies to treat severe and life threatening diseases. In particular, the company is engaged in the development of pharmaceutical products using XmAb technology platform to create antibody product candidates designed to treat autoimmune and allergic diseases, cancer and other conditions.
Novartis is a global healthcare company based in Switzerland that provides solutions to address the evolving needs of patients worldwide. It will be buying the rights to pipeline drug candidates XmAb14045 and XmAb13676, which are being developed as potential treatments for acute myeloid leukemia and B-cell malignancies. These drugs are expected to enter clinical development later this year.
Under the terms of the agreement, Xencor is receiving a $150 million upfront payment from Novartis and the two companies will equally share the cost to jointly develop two Xencor antibodies targeting the CD3 domain,” Novartis said.
Under this deal, Novartis will have the rights to these drugs outside of the US, which means that Xencor can still have room to commercialize the product on its own or with another partner company in the country. Apart from that, Xencor is entitled to received tiered double-digit royalties on future sales of the drug overseas.
Also, the two companies will be sharing future development costs related to these drugs. Analysts predict the deal to be worth $2.4 billion, accounting for the achievement of all clinical, regulatory, and sales milestones. Apart from that, Novartis is also set to receive rights to develop and commercialize four other bispecific antibodies, using Xencor’s antibody technology in up to 10 additional molecules.
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