Zymeworks and Daiichi Sankyo said they have expanded their two-year-old immuno-oncology collaboration focused on bispecific antibodies, more than tripling the value of their partnership to nearly $485 million.

The companies said they signed a second agreement, under which Daiichi Sankyo will acquire licenses to Zymeworks’ Azymetric™ and EFECT™ technology platforms to develop two additional bispecific antibody therapeutics.

Azymetric is designed to enable the transformation of monospecific antibodies into bispecific antibodies. By simultaneously binding two different targets, Zymeworks reasons, it can develop biotherapeutics with enhanced efficacy and reduced toxicity and drug resistance, since the resulting bispecific antibodies are capable of blocking multiple signaling pathways, recruiting immune cells to tumors, enhancing receptor clustering and degradation, and increasing tumor-specific targeting.

EFECT is a library of antibody crystallizable fragment (Fc) modifications engineered to modulate the activity of the antibody-mediated immune response, which includes both the up- and downregulation of effector functions. Zymeworks says the platform is compatible with traditional monoclonal as well as Azymetric bispecific antibodies, and further enables the customization of therapeutic responses for different diseases.

Daiichi Sankyo has agreed to pay Zymeworks an up-front “technology access fee” of $18 million; up to $466.7 million in payments tied to achieving clinical, regulatory, and commercial milestones; and up to double-digit tiered royalties on global product sales.

“We are exceptionally impressed with the robust impact that Zymeworks’ technology brings to antibody development,” Antoine Yver, M.D., EVP and global head, oncology research and development, Daiichi Sankyo, said yesterday in a statement. “We look forward to adding two more bispecific compounds to our pipeline.”

Building on Up-to-$150.9M Collaboration

The new accord builds on a collaboration agreement inked in September 2016, when Zymeworks and Daiichi Sankyo agreed to use the Azymetric and EFECT platforms to develop one bispecific antibody therapeutic.

In return, Daiichi Sankyo agreed to pay Zymeworks up to $150.9 million, consisting of a $2 million up-front “technology access” fee, a $1 million research milestone payment, development milestone payments and a commercial option payment totaling up to $67.9 million, and commercial milestone payments of up to $80.0 million, according to Zymework’s Form 10-K Annual Report for 2017, filed March 14.

Zymeworks received the $2 million up-front payment—and in July 2017 received the $1 million research milestone payment related to the first immuno-oncology bispecific antibody therapeutic candidate.

Zymeworks added that it was also eligible to receive tiered royalties ranging from the low single digits up to 10% on product sales, with the royalty term being, on a product-by-product and country-by-country basis, either (1) for as long as there is Zymeworks platform patent coverage on products, or (2) for 10 years beginning from the first commercial sale, whichever period is longer.

As part of that original agreement, Zymeworks also gained nonexclusive rights to develop and commercialize up to three products using Daiichi Sankyo’s proprietary immune-oncology antibodies, with royalties in the low single digits to be paid to Daiichi Sankyo on sales of such products.

“Expanding our relationship with a leading global pharmaceutical partner like Daiichi Sankyo is extremely satisfying as it underscores the power, versatility, and attractiveness of our technology platforms,” added Zymeworks president and CEO Ali Tehrani, Ph.D.

Daiichi Sankyo is one of several biopharma giants to partner with Zymeworks. Others establishing collaborations with Zymeworks include Johnson & Johnson’s Janssen Biotech, Celgene, Daiichi-Sankyo, GlaxoSmithKline, Eli Lilly, and Merck & Co.

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