Macrogenics Inc. shares (NASDAQ:MGNX) approached an all-time high Monday as Janssen Biotech Inc. agreed to pay $50 million up front for a global license to MGD011, a preclinical bispecific antibody targeting CD19 and CD3 that Janssen will test as a potential treatment for a wide range of B-cell malignancies.

The deal, together with a $75 million equity investment from Johnson & Johnson Development Corp. Inc., the venture arm of Janssen's owner J&J, registers a big vote of confidence in Macrogenics' Dual-Affinity Re-Targeting (DART) platform at a time when bispecific antibodies are gaining traction in the immunotherapy space, as evidenced by the FDA's accelerated approval of Amgen Inc.'s blinatumomab earlier this month. (See BioWorld Today, Dec. 4, 2014.)

"The vote of confidence is certainly there," Macrogenics' president CEO Scott Koenig told BioWorld Today. "It also attests to the strong interest and commitment of Janssen to develop this molecule potentially quite broadly and aggressively.

"This infusion of capital from both the up-front, potential near-term milestones and the equity investment extends our runway, providing us more capital that we can use for both the development of our clinical and preclinical pipeline. So this is a very valuable deal for us from those vantage points," Koenig added. Prior to the deal, the company had told Wall Street it had $179 million in cash and cash equivalents, a sufficient capital burn into 2017. Now that picture is "only better," Koenig said.

Assuming successful development and commercialization, Janssen could pay Macrogenics an additional $575 million in clinical, regulatory and commercialization milestone payments. The Rockville, Md.-based company is also eligible to receive double-digit royalties on any global net sales and has the option to co-promote the molecule with Janssen in the U.S.

Macrogenics has so far demonstrated the molecule's ability to eliminate lymphomas and prevent tumor metastasis in mouse models. The company has also had the opportunity to examine the toxicology of the molecule in cynomolgus monkeys and measure its activity against CD19-expressing B cells.

Preclinical data presented during the recent American Society of Hematology meeting in San Francisco demonstrated MGD011's antitumor activity in vitro and in mouse leukemia and lymphoma tumor models, with what the company said was high complete response rates and no evidence of relapse over the study duration.

The therapy also induced durable, marked decrease in circulating B lymphocytes and significant B-cell depletion in lymphoid organs in cynomolgus monkeys following once-a-week dosing.

The therapy was well tolerated at doses up to 100 mcg/kg, the highest dose tested, with modest elevations in serum cytokines but no adverse findings, the company said.

Next up, Janssen will take full responsibility for developing the molecule following submission of an investigational new drug application, planned for 2015. Macrogenics may elect to fund a portion of late-stage clinical development in exchange for a profit share in the U.S. and Canada, but said it was too early to decide whether or not it will do so.

The deal follows closely on the heels of an October deal between Macrogenics and Takeda Pharmaceutical Co. Ltd., in which the Osaka, Japan-based company optioned exclusive licenses to four DART-based candidates for up to $1.6 billion after an apparently positive foray with MGD010, another Macrogenics molecule that it licensed in May. (See BioWorld Today, May 28, 2014, and Oct. 8, 2014.)

Macrogenics also has DART-based deals with Suresnes, France-based Les Laboratoires Servier SA, Ingelheim, Germany-based Boehringer Ingelheim GmbH and Pfizer Inc., of New York. (See BioWorld Today, Oct. 27, 2010, Dec. 1, 2011, and Sept. 20, 2012.)

Although immunotherapies employing CAR T-cell technology have generated considerable excitement in the B-cell malignancy space, Koenig said bispecific antibodies such as MGD011 can potentially deliver greater convenience, without the complexities involved in preparation of patient-specific CAR T therapies.

"We anticipate this molecule can be given fairly infrequently, no more than once a week or maybe less frequently than that," Koenig said.

In the Leerink Partners LLC's 2015 industry outlook, analyst Michael Schmidt said he believes bispecific antibodies are poised to play a significantly more important role in cancer immunotherapy "since they hold the promise of effectively redirecting a patient's immune response to specific tumor antigens with the convenience of easy to use 'off-the-shelf' antibody products."

Schmidt called the Janssen deal "extremely favorable" for Macrogenics, ahead of a "catalyst-rich" year for the company. As of Nov. 11, the company said it had four oncology programs in the clinic, including DARTs against both hematological malignancies and solid tumors. Meanwhile, it's enrolling patients in a phase I study of MGD006 for the treatment of acute myeloid leukemia; dosing patients in a phase I study of MGD007 for the treatment of colorectal cancer; making continued headway with the Takeda-partnered MGD010; and preparing for a third quarter initiation of a pivotal phase III study of margetuximab, a monoclonal antibody enhanced using its Fc optimization technology, in in HER2-postitive breast cancer.

Shares of Macrogenics rose $4.05, or 11.7 percent, closing at $38.58 on Monday.