Xencor, Inc. (Xencor), a clinical-stage biopharmaceutical company, has entered into a collaboration and license agreement with Novartis to develop and commercialize novel therapeutics, including XmAb14045 expected to begin clinical development for acute myeloid leukemia in 2016; and XmAb13676 also expected to begin clinical development for B-cell malignancies in 2016.

"We are excited to move forward in collaboration with Novartis on the development of XmAb14045 and XmAb13676, while maintaining our rights in the US," said Bassil Dahiyat, Ph.D., president and chief executive officer of Xencor. "This opportunity to work with and learn from a world leader in the late-stage development and commercialization of immune-oncology drugs gives us the opportunity to take our lead drugs through clinical development and into commercialization in the US and, with the other molecules to be developed, continues to expand the reach of our technology."

Under the terms of 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.

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.

Efforts at bispecific antibody design are typically frustrated by poor molecular stability, difficulties in production and short in vivo half-life. 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 novel drug candidates in a range of molecule formats.

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.

Xencor's proprietary XmAb antibody engineering platform creates subtle, precise alterations to the antibody's Fc domain — the stem of the structure that is responsible for antibodies' natural immune functions and highly stable structure. These subtle changes elicit dramatically enhanced performance. XmAb Fc domains are plug-and-play and can be substituted into nearly any antibody. The resulting engineered antibodies retain the beneficial stability, pharmacokinetics and ease of development of natural antibodies, and are produced with standard methods for antibody manufacturing. We have created four lead XmAb Fc domains, each enhancing a key property for antibody therapeutics: our Bispecific, Immune Inhibitor, Cytotoxic and Xtend Fc domains.

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