Celgene will partner with Northern Biologics to discover and develop first-in-class therapeutic antibodies against cancer and fibrosis, the venture-backed startup said today, in a deal that gives the biotech giant an option to buy its partner.

The deal’s value was only partially disclosed. It includes a $30 million cash upfront payment that Celgene has agreed to pay Northern Biologics, with potential for additional payments.

In return, Celgene will have options to in-license drug candidates to be developed by the partners, based on Northern Biologics’ therapeutic antibodies in oncology and fibrosis. The startup will advance its development work from preclinical discovery through human clinical trials.

Northern Biologics licenses intellectual property from both University of Toronto and University Health Network (UHN), including drug leads and a phage display platform designed for antibody generation.

That IP includes a catalog of thousands of antibodies matched with hundreds of targets in human cells—discoveries made by Northern Biologics founder Sachdev Sidhu, Ph.D., and colleagues at the University of Toronto Donnelly Centre for Cellular + Biomolecular Research, and before that as a principal investigator at Genentech.

“You can’t keep building a catalogue forever. You have to let things out,” Dr. Sidhu told The Globe and Mail of Toronto in December, referring to the antibodies as a “war chest.” Dr. Sidhu also heads the Toronto Recombinant Antibody Centre, and the Centre for Commercialization of Antibodies and Biologics, both based at the Donnelly Centre.

Headquartered in Toronto’s MaRS Discovery District, Northern Biologics was launched in June 2014 as the first spinout biotech company of Blueline Bioscience, a Canadian biotechnology incubator backed by venture capital firm Versant Ventures, in partnership with the University of Toronto and UHN’s Princess Margaret Cancer Centre.

In December, Versant committed $10 million in Series A financing to the company. Under an agreement with Blueline, Celgene secured the right to negotiate an R&D collaboration with Northern Biologics, under which additional upfront capital and undisclosed future payments would be provided to the startup, the incubator disclosed in December.

At the time, Northern Biologics identified the recruitment of its scientific team, and rapid advancement of its first drug candidates in preparation for human clinical trials as its two most significant priorities over the next one to two years. Northern Biologics anticipated having a team of at least 20 people in place by the end of 2015.

“Celgene's financial and scientific contributions will enable us to rapidly progress our therapeutic antibodies to the clinic,” Northern Biologics CEO Stefan Larson, Ph.D., said today in a statement. Dr. Larson is also an Entrepreneur-in-Residence at Versant and president of Blueline Bioscience.

Celgene’s collaboration with Northern Biologics is the latest deal in a busy month for the biotech giant. On Monday, Celgene agreed to acquire Quanticel Pharmaceuticals for up to $485 million, exercising an option to buy following a three-and-a-half-year partnership. Also, last week, Celgene launched an up-to-$450 million-plus upfront partnership with AstraZeneca and its MedImmune biologics R&D arm to develop its MEDI4736 both alone and in combination with other AstraZeneca and Celgene cancer medicines.

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