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Incyte & Hengrui to Develop Anti-PD-1 Monoclonal Antibody

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Incyte Corporation’s (INCY - Free Report) shares were up 7.1% on the company’s announcement of a global license and collaboration agreement with Jiangsu Hengrui Medicine Co., Ltd. to develop and commercialize an anti-PD-1 monoclonal antibody, SHR-1210.

SHR-1210 is being developed for the treatment of patients with advanced solid tumors and is expected to enter proof-of-concept studies in the coming months.

Terms of the Deal

Incyte will make an upfront payment of $25 million to Hengrui. In exchange, the company will acquire global rights to develop and commercialize SHR-1210, except in Mainland China, Hong Kong, Macau, and Taiwan.

In addition, Hengrui is entitled to receive potential milestone payments of up to $770 million, which includes $150 million based on clinical superiority, and milestone payments of $90 million and $530 million for regulatory approval and commercial performance, respectively. The company will also receive tiered royalties from net sales in Incyte’s territories.

Both the companies will be responsible for financial obligations associated with the development and commercialization of the candidate in their respective territories.

With this deal, Incyte is looking to strengthen its oncology pipeline. Earlier this year, the company inked a global agreement with Agenus Inc. (AGEN - Free Report) to develop and commercialize novel immuno-oncology antibodies using Agenus’ proprietary Retrocyte Display antibody discovery platform.

A currently approved anti-PD-1 therapy is Merck & Co. Inc. (MRK - Free Report) ’s Keytruda.

Incyte carries a Zacks Rank #3 (Hold). A better-ranked stock in the health care sector include Gilead Sciences Inc. (GILD - Free Report) , sporting a Zacks Rank #1 (Strong Buy).

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