Eli Lilly and Company has decided to develop one or more therapeutic proteins created by Xencor under its collaboration with Xencor. Xencor used its proprietary Protein Design Automation (PDA) technology to optimize the physical and biochemical properties of a therapeutic protein. In less than 12 months, Xencor created variants of the protein that satisfied specific criteria established prior to the initiation of the project.

Under the terms of the agreement, Xencor granted to Lilly an exclusive, worldwide license to develop and commercialize certain therapeutic proteins derived from the collaboration. Xencor will receive an upfront license fee and is eligible to receive milestone payments in the event Lilly advances one or more candidates into development, as well as royalties on sales of licensed products. No additional financial terms were disclosed.

PDA technology combines high performance computing with proprietary molecular biology processes and assays to create very broad protein diversity with exquisite control and efficiency. This technology takes advantage of the information embedded in protein structure to optimize key protein properties, such as binding affinity, selectivity, stability and expression level, which are targeted to yield therapeutic proteins with enhanced safety and efficacy in the clinic. This process also creates new intellectual property, continually broadening Xencor's patent portfolio by generating sets of novel protein sequences that are distinct from naturally occurring proteins, the release added.