Lilly bets another $375M on Zymeworks' two-pronged cancer tech

Eli Lilly headquarters

Eli Lilly ($LLY) is expanding its relationship with Canadian biotech Zymeworks, signing a broader deal that promises up to $375 million in milestones for its partner as the two collaborate on cancer immunotherapies.

The agreement follows a January deal between the two in which Lilly paid an undisclosed sum for nonexclusive rights to Zymeworks' platform, a system for developing bispecific antibodies that allow a single drug to target two antigens and induce a synergistic immune response.

Now Lilly is sweetening the pot, eyeing an undisclosed number of new bispecific cancer therapies using Zymeworks' Azymetric technology and promising the biotech a cut of any sales that stem from the collaboration. Zymeworks is due an unspecified up-front payment in the form of an equity investment, the company said, and the majority of the $375 million in potential rewards is tied development and commercial milestones.

For Lilly, the deal is part of a widespread embrace of immunotherapies for cancer, as the drug giant works to expand its oncology pipeline beyond small-molecule therapies and standard antibodies.

In July, the Indiana drugmaker signed a deep-seated agreement with the U.K.'s Immunocore, tapping the biotech's ImmTAC technology to spotlight treatments that can marshal the body's T cells to home in on cancer. And Lilly expects to keep expanding the scope of its research in the field, Oncology President Sue Mahony said, lining up as many shots on goal as possible.

"There are many targets involved in the controlled activation and redirection of the immune system, and we know that immunotherapies will not be a one-size-fits-all treatment," Mahony said in a statement. "In addition to immunotherapy programs, Lilly has a robust oncology pipeline that includes both small molecules and monoclonal antibodies, which are being studied to treat a wide range of cancers."

For Zymeworks, the deal is a further affirmation of its promising technology, and the undisclosed equity investment follows a $15 million round raised earlier this year. The biotech is also working with Merck ($MRK) under a $187 million agreement similarly focused on bispecific antibodies.

- read the statement

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