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Amgen Enters Into an Immuno-Oncology Partnership With CytomX

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Amgen, Inc. (AMGN - Free Report) announced a strategic immuno-oncology collaboration with CytomX Therapeutics, Inc. (CTMX - Free Report) to jointly develop a T-cell engaging bispecific probody. For the deal, Amgen will make an upfront payment of $40 million to CytomX besides investing $20 million in the California-based biotech company’s stock.

Markedly, the companies will develop CytomX Probody T-cell engaging bispecific program that targets the EGFR protein, thereby offering significant potential in treating various types of cancers.

While CytomX will lead early development, Amgen will take care of late-stage development and commercialization. However, the late-stage development costs will be shared between the two companies. Apart from the upfront payment and the equity investment, CytomX will also be eligible to receive up to $455 million in milestones as well as an opt-in right in the U.S. profits and royalties on outside U.S. sales, if the product is commercialized.

Per the deal, Amgen also receives global right to develop and commercialize up to three undisclosed CytomX candidates. If Amgen takes all these targets, CytomX will be eligible to receive $950 million in upfront payments and milestones as well as royalties on the resulting products.

The addition of the bispecific technology platform expands Amgen’s immuno-oncology capabilities, while giving CytomX a strong partner in Amgen and ensuring a regular flow of funds.

While shares of CytomX were up 35% in after-hours trading on Tuesday, Amgen’s shares remained stable. Nonetheless, Amgen’s shares have rallied 28.1% better than the industry’s growth of 15.4% so far this year.

Currently, Amgen holds a Zacks Rank #2 (Buy). You can seethe complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Key Picks

Some other top-ranked biotech stocks sporting the same bullish rank as Amgen include Biogen, Inc. (BIIB - Free Report) and Celgene Corporation .

Biogen has witnessed the Zacks Consensus Estimate for current-year earnings climb 4.5% for 2017 and 2.3% for 2018 over the past 90 days. The company’s shares have increased 11.9% this year.

Celgene’s earnings estimates for both 2017 and 2018 have inched up by 0.7% in the past 90 days. The stock has rallied 26.2% this year, outperforming the industry.

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Biogen Inc. (BIIB) - free report >>

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CytomX Therapeutics, Inc. (CTMX) - free report >>

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