Amgen and Xencor ink $500 million option pact to co-develop novel antibody for autoimmune diseases

US biotech major Amgen (Nasdaq: AMGN) and privately-held Xencor have signed a collaboration to develop XmAb n5871, an Fc- engineered monoclonal antibody dually targeting CD19 and CD32b, that could earn the latter firm as much as $500 million. XmAb5871 is currently in late-stage preclinical development for the treatment of autoimmune diseases.

Under the terms of the agreement, Amgen has the option to an exclusive worldwide license following the completion of a pre-defined Phase II study. Xencor will lead all clinical development until that time. Xencor will receive up-front and early development milestone payments. If Amgen does exercise its option, the biotech giant will assume responsibility for future development, Xencor will receive an option-exercise fee which, combined with the undisclosed up-front and early development milestones, will total $75 million. Moreover, Xencor could receive up to an additional $425 million in clinical, regulatory and commercialization milestone payments, and will be eligible for tiered royalties on future sales of XmAb5871.