Xencor has entered into a license and collaboration agreement with Genentech, Inc. to create next-generation therapeutic antibodies for cancer and autoimmune diseases.

Under the terms of the agreement, Xencor will grant to Genentech an exclusive, worldwide license to use Xencor's XmAb technology to develop and commercialize products directed against two clinically and commercially validated antibody targets, CD20 and Her2, and a third undisclosed antigen.

Rituxan (rituximab) targets CD20 and is marketed by Genentech and Biogen-Idec in the United States, Zenyaku in Japan and Roche in the rest of the world. Herceptin (trastuzumab), which is marketed by Genentech in the United States and Roche in the rest of the world, targets the Her2 protein. The XmAb technology consists of a suite of proprietary engineered antibody Fc domains that can be incorporated into therapeutic candidates to potentially recruit the immune system's effector functions for the treatment of disease.

Xencor will receive an upfront fee of $5 million and annual licensing fees. In addition, Xencor is eligible to receive pre-clinical, clinical and regulatory milestone payments for each collaboration target and royalties on sales of licensed products. No additional financial terms were disclosed.

"We are very excited to have Genentech as a partner using our XmAb technology to develop next generation antibody therapeutics against two such well-validated targets," said Harry Stylli, president and CEO of Xencor. "Modulation of the immune system's effector functions holds the potential for improving efficacy and for benefiting a larger patient population. By licensing our proprietary engineered Fc domains for use with these targets, this collaboration advances the licensing arm of our dual business strategy that also includes retaining rights for the internal development of other, select targets," he added.

Xencor, Inc. is a privately held biopharmaceutical company focused on the discovery and development of protein therapeutics for the treatment of cancer, inflammation and autoimmune disorders.