Amgen Inc. (AMGN, Financial) announced Oct. 4 it has entered a partnership with CytomX Therapeutics Inc. (CTMX, Financial) to collaborate on immuno-oncology therapies.Â
The two companies will work together to develop a probody T-cell engaging bispecific, which is a laboratory-made antibody that binds to specific targets in tumors. The drug will target the epidermal growth factor receptor protein, or EGFR, to help the immune system identify and destroy cancer cells.Â
CytomX will be in charge of the initial stages of the development. Amgen will take over later development and commercialization. The two companies will share the costs associated with late-stage development.
According to the terms of the deal, Amgen will pay $40 million upfront and purchase $20 million worth of CytomX's common stock. CytomX will receive up to $455 million in milestone payments for the EGFR program.Â
Amgen will also receive rights to develop and commercialize up to three additional targets. Should the company pursue these targets, CytomX will be able to receive up to $950 million in additional upfront and milestone payments as well as royalties from any resulting products.Â
While CytomX will also receive the rights to an undisclosed preclinical T-cell engaging bispecific program, Amgen will benefit from milestone and royalty payments on any resulting products from the program.
Amgen is currently trading around $187.23 per share with a market capitalization of $136.62 billion, a price-book (P/B) ratio of 4.28, a price-sales (P/S) ratio of 6.03, a price-earnings (P/E) ratio of 17.03 and an EV/Ebitda ratio of 10.54.
CytomX Therapeutics is currently trading around $19 per share on the Nasdaq with a market capitalization of $700.48 million, a P/B ratio of 13.36 and a P/S ratio of 23.05.
Disclosure: I have no positions in any stocks mentioned in this article.
