Xencor, Inc., a clinical-stage biopharmaceutical company, has received a milestone payment from Merck, through a subsidiary, triggered by the initiation of a phase 1 clinical trial for an undisclosed biologic drug candidate that uses Xencor’s XmAb antibody engineering intellectual property (IP).

“Merck’s programme is the sixth drug candidate using our XmAb intellectual property currently in clinical trials and is the latest example of our technology offering partners an opportunity to create best-in-class therapeutics,” said Bassil Dahiyat, president and chief executive officer of Xencor. “By selectively licensing our XmAb technology, we believe we create value in non-core areas, thus allowing us to focus on advancing our key internal development programmes.”

Under the terms of the agreement signed in June 2013, Xencor granted Merck a non-exclusive license to certain Xencor patents for use in an undisclosed product, as well as an option to license the same intellectual property for future products. Xencor received an upfront payment and continues to receive annual maintenance fees.

Xencor is also eligible to receive milestone payments associated with the successful development of Merck product candidates, as well as royalties on sales of any potential products that may result from this agreement.

In contrast to conventional approaches to antibody design that focus on the Fv domain responsible for binding to target cells, Xencor’s XmAb antibody engineering technology focuses on the Fc domain, the portion of the antibody that interacts with multiple segments of the immune system.

Xencor’s XmAb Fc domains have shown an ability in preclinical and clinical studies to enhance antibody performance while typically maintaining over 99.5 per cent identity in structure and sequence to natural antibodies. This design allows our engineered antibodies to retain the beneficial stability, pharmacokinetics and ease of discovery of natural antibodies, while utilising validated methods for antibody manufacturing.

Xencor is a clinical-stage biopharmaceutical company developing engineered monoclonal antibodies for the treatment of autoimmune diseases, asthma and allergic diseases, and cancer.