Amgen Inc. agreed to pay $40 million up front and as much as $455 million in milestones to access as many as four T-cell engaging bispecific antibodies developed by Cytomx Therapeutics Inc. Built with Cytomx’s Probody technology, each carries the potential to localize cytotoxic activity within the tumor microenvironment, limiting off-target effects. The agreement, which starts with a preclinical bispecific targeting EGFR/CD3, also includes a $20 million equity investment.

In addition, Thousand Oaks, Calif.-based Amgen secured an option to develop and commercialize candidates for up to three additional undisclosed targets for as much as $950 million more and licensed Cytomx a T-cell bispecific program that can advance in Probody form if it chooses to do so. Amgen would then receive milestones and royalty payments from Cytomx.

Cytomx shares (NASDAQ:CTMX) rose $4.09, or 21.5 percent, to $23.09 by Wednesday’s market close after hitting a 52-week high earlier in the day.

The new deal builds on Amgen’s long-term investment in the bispecific space, exemplified by key deals it struck with bispecific T-cell engager specialist Micromet Inc. before buying it outright less than a year later and a more recent deal with Immatics Biotechnologies GmbH focused on developing two bispecific T-cell engager molecules. (See BioWorld Today, July 12, 2011, Jan. 27, 2012, and Jan. 10, 2017.)

“Oncology is clearly moving toward more and more potent drugs,” Cytomx’s chief financial officer and head of corporate development, Debanjan Ray, told BioWorld. “But there are lots of great targets out there that aren’t available to these potent drugs because they’re both on the tumor and, in many case, also on healthy tissue,” he said.

South San Francisco-based Cytomx seeks to address that problem by building antibody-based therapies it calls “Probody” therapeutics, which are designed to exploit certain unique conditions present in the tumor microenvironment with the goal of more effectively localizing antibody binding and activity while limiting activity in healthy tissues.

Safety issues have long plagued bispecific antibodies in development, Jefferies analyst Biren Amin wrote, citing an FDA hold placed on Johnson & Johnson’s bispecific antibody program targeting CD123 (JNJ-63709178) over undisclosed safety issues as an example, and safety issues with another bispecific, Removab (catumaxomab, Neovii Biotech GmbH), which is approved in the EU for treatment of malignant ascites in patients with epithelial cancers where standard therapy was not feasible.

Though Cytomx has built the technology into two key assets of its own, the PD-L1 Probody CX-072 and the Probody-drug conjugate CX-2009, it has also long pursued a two-pronged partnering strategy, Ray said.

“On one hand, we have granted limited target-based licenses to the platform primarily around targets that we are not pursuing, most notably Pfizer and BMS. On the other hand, on a selective basis, we have granted certain partners licenses through existing preclinical assets for which we have retained significant development responsibility, certain co-development rights and profits for economics,” he said.

The latter approach applies to the company’s collaboration with Abbvie Inc. on its CD71-targeted Probody drug conjugate program, and now its new alliance with Amgen on the EGFR/CD3 T-cell bispecific program. Altogether, the deals have provided Cytomx with more than $375 million in up-front and milestone payments so far.

Cytomx will lead early development of the EGFR/CD3 T-cell bispecific, while Amgen will take charge of later development and commercialization. Should it decide to do so, Cytomx retains a right to opt into a profit-share in the U.S. and receive tiered, double-digit royalties on net product sales outside of the U.S.

In light of the new deal, Ray said he expects Cytomx to end 2017 with a cash balance between $355 million and $365 million, sufficient cash to fund the 70-person company’s operations “comfortably” into 2020, assuming no new additional partnerships.