Novartis has entered into a collaboration and license agreement with Xencor, a clinical-stage biopharmaceutical company, to develop and commercialize therapeutics, including XmAb14045, expected to begin clinical development for acute myeloid leukemia in 2016, and XmAb 13676, also expected to begin clinical development for B-cell malignancies in 2016.

Under the agreement, the parties will collaborate and share development costs for the worldwide development of XmAb14045 and XmAb13676, with Xencor maintaining US commercialization rights and Novartis having commercialization rights in the rest of the world. Novartis will receive worldwide rights to Xencor’s bispecific technology to develop and commercialize four additional targets selected by Novartis, one of which Xencor may elect to co-detail in the US. The bispecific collaboration will include molecular engineering by Xencor. Additionally, Novartis will receive a worldwide non-exclusive license to use Xencor’s XmAb Fc technologies in up to ten molecules.

Xencor will receive a $150 million upfront payment and is eligible to receive clinical, regulatory, and sales milestone payments for successful programs. Xencor is also eligible to receive tiered, low double-digit royalties for sales of XmAb14045 and XmAb13676 outside of the US, mid single-digit tiered royalties for worldwide sales of the four proprietary Novartis bi-specific molecules, unless Xencor exercises its right to co-detail one of these molecules and share in the costs and US profit, and low single-digit royalties on Novartis molecules incorporating Xencor’s XmAb Fc technology.

Xencor’s initial bispecific programs are tumor-targeted antibodies that contain both a tumor antigen binding domain and a cytotoxic T-cell binding domain (CD3 binding domain). These bispecific antibodies activate T cells at the site of the tumor for highly potent killing of malignant cells. The XmAb Fc domain format allows Xencor to tune the potency of the T-cell killing, potentially improving the tolerability of tumor immunotherapy.

As opposed to traditional monoclonal antibodies that target and bind to a single antigen, bispecific antibodies are designed to elicit multiple biological effects that require simultaneous binding to two different antigen targets. Xencor’s XmAb bispecific Fc domain technology is designed to maintain full-length antibody properties in a bispecific antibody, potentially enabling favorable in vivo half-life and simplified manufacturing. Xencor has engineered a series of Fc domain variants that spontaneously form stable, heterodimeric bispecific antibodies and that can be made and purified with standard antibody production methods. These bispecific Fc domains are used to generate a broad array of drug candidates in a range of molecule formats.

Source; Xencor