Amgen Signs Development Pact with Xencor

Amgen Inc. struck a research and license agreement with Xencor Inc., a move aimed at expanding its immuno-oncology portfolio as the biotech company faces increased competition from copycat drugs.

The agreement with Xencor covers six programs for which Amgen will be fully responsible for preclinical and clinical development and commercialization.

The collaboration, which includes molecular engineering by Xencor and preclinical development of bispecific molecules for five programs proposed by Amgen, brings together Amgen's capabilities in target discovery and protein therapeutics with Xencor's XmAb antibody engineering technology platform, the companies said.

Amgen, which has faced pressure from activist shareholders, like other big drug companies needs to bring new treatments to market as older ones face the threat of low-price competition.

An appeals court recently denied California-based Amgen's request to block Swiss rival Novartis AG from selling a biosimilar version of Amgen's cancer-care medicine Neupogen. Last year, the drug brought in $5.76 billion and represented a quarter of Amgen's top line. Novartis said it would start selling the first biosimilar drug in the U.S. at a 15% discount to the original.

Xencor, also based in California, specializes in developing monoclonal antibody therapeutics for the treatment of cancer, autoimmune disorders and asthma, among other conditions. Its XmAb platform is used to make subtle changes to the structure of monoclonal antibodies, and Xencor has eight drug candidates in clinical development.

Under the terms, Xencor will receive a $45 million upfront payment and is eligible for up to $1.7 billion in milestone payments. Xencor may also receive royalties, the companies said.

Shares in Amgen, down about 4.5% this year, were inactive premarket. Xencor's stock, about flat year-to-date, surged 30% in premarket trading.

Write to Lisa Beilfuss at [e-mail]

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(END) Dow Jones Newswires

September 16, 2015 09:05 ET (13:05 GMT)

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