Novartis has entered into a collaboration and licensing agreement with Xencor for the development of bispecific antibodies for treating cancer. The agreement is the latest in a series of acquisitions and strategic collaborations between Novartis and biotech companies that have helped bolster its deep and diverse immuno-oncology pipeline.

Traditional monoclonal antibodies target and bind to a single antigen. Bispecific antibodies are engineered to recognize and target two different antigens, which makes them potentially more effective in targeting complex diseases. A T-cell engaging bispecific antibody is able to bind an antigen on a tumor cell with one arm and engage T-cells capable of their destruction with the other.

Novartis receives the right to develop four additional bispecific antibodies and to use other Xencor proprietary antibody engineering technology for up to ten additional biotherapeutic programs across the Novartis R&D portfolio. In addition, The companies will collaborate to co-develop Xencor's two bispecific T-cell engaging antibodies targeting CD3xCD123 and CD3xCD20 for the treatment of acute myeloid leukemia and B-cell malignancies.

"This collaboration is part of our strategy to join forces with technology innovators who can help us rapidly advance new medicines to the clinic," said Jay Bradner, president of the Novartis Institutes for BioMedical Research. "We look forward to working with the Xencor team to advance these programs in immuno-oncology and to using their antibody engineering platform to develop biotherapeutics for additional diseases."

The addition of Xencor's T-cell engaging bispecific antibody programs expands Novartis' immuno-oncology portfolio that includes novel checkpoint inhibitors, chimeric antigen receptor T-cell (CART) technology, myeloid cell targeting agents, the T-cell stimulating factor IL-15, STING agonists that enhance immune recognition of cancers, and adenosine receptor antagonists and TGF-beta blocking antibodies that overcome immunosuppression in the tumor microenvironment. Currently seven of these programs are in the clinic and five more are expected to enter the clinic individually and as combinations by the end of 2016.

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. Xencor retains full US commercial rights to these programs, and Novartis has ex-US commercial rights. In addition to these antibodies, Novartis receives worldwide rights to develop and commercialize four additional bispecific programs, with Xencor eligible to "opt in" to one of these programs in the U.S.