Sutro Biopharma said today it will use its cell-free protein synthesis technology platform to design and develop for Celgene new antibody drug conjugates (ADCs) and bispecific antibodies for two undisclosed targets—as well as manufacture a proprietary Celgene antibody—under a deal that could return Sutro as much as $500 million.

In return, Sutro will receive from Celgene an undisclosed “substantial” up-front payment, an equity investment in the company, and payments for completion of research, development, and regulatory milestones. The collaboration could generate up to $500 million, plus royalties on product sales for Sutro, if all milestones are met, the companies said.

Sutro said its biochemical synthesis technology allows for rapid and systematic exploration of many protein-drug variants to identify drug candidates. Once these product candidates are identified, production can be rapidly and predictably scaled up to commercial levels at Sutro’s cGMP facility for the production of clinical supplies of materials using its biochemical protein synthesis platform.

“We look forward to working with the team at Sutro and to exploring their platform’s potential to accelerate the discovery and development of superior multifunctional biologics,” Thomas Daniel, M.D., Celgene president, global research and early development, said in a statement.

Sutro says it is looking to develop new ADC drugs and bifunctional antibody-based therapeutics for targeted cancer therapies. The new treatments are aimed at significantly extending the clinical impact of current oncology therapeutic approaches beyond that of current, cell-based expression technologies.

Last year, Sutro secured $36.5 million in Series C funding—of which it closed in May on the $16.5 million second tranche. Also in 2011, Sutro inked a deal with an even larger pharma giant, Pfizer, for to research, develop, and commercialize new peptide-based therapeutics, in return for undisclosed up-front and milestone payments and royalties.

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