San Diego's AnaptysBio has cut a deal with Tesaro (NASDAQ: TSRO) that gives the Waltham, Mass.-based biopharmaceutical a new opening in the hot field of cancer immunotherapy.

Under the deal, Anaptys has granted Tesaro exclusive worldwide rights to preclinical antibody programs that target three "checkpoint" receptors (PD-1, TIM-3, and LAG-3) that regulate T cells, one of the white blood cell types that play a central role in the body's immune response. Tesaro agreed to pay $17 million upfront to license the three programs and to fund preclinical development, which will continue at AnaptysBio, according to CEO Hamza Suria.

Should those prospects make it to clinical trials, Tesaro would then take the lead in development and shell out more cash to the San Diego company. Tesaro could pay AnaptysBio as much as $18 million per drug candidate in certain research and development milestone payments, and another $90 million per program should each hit certain regulatory goals. Should these experimental antibodies ever see the market, Anaptys also stands to receive some royalties and other payments tied to sales figures. All told, the deal could eventually net Anaptys more than $341 million if everything breaks right.

In a statement from Tesaro, CEO Lonnie Moulder said, "We view immuno-oncology as a platform that can potentially transform the way in which numerous cancers are treated, and we expect immunotherapy-based approaches to become the foundation of many future cancer therapy regimens."

AnaptysBio uses a process called somatic hypermutation to make therapeutic antibodies that can be optimized for a broad range of specific targets. The company has focused its own efforts on developing antibody treatments for inflammatory diseases, and has struck partnerships with Merck, Roche, Novartis, Celgene, Gilead Sciences, Momenta Pharmaceuticals, and others to advance other antibody programs.

AnaptysBio considered proposals from a number of other companies, including some Big Pharmas, Suria said. The company chose Tesaro because of their development skills and their ability to move these assets from preclinical development through clinical studies and beyond, he said. Tesaro was founded on the idea of acquiring cancer drug candidates discovered by others and developing them in-house.

Even so, the competition to develop new antibody therapies that help the immune system fight cancer is already fierce. As Xconomy's Ben Fidler has reported, Merck, Roche/Genentech, and Bristol-Myers Squibb are all working in the area, and Novartis recently acquired Cambridge, Mass.-based CoStim Pharmaceuticals and its catalog of "late discovery stage immunotherapy programs," including one that targets PD-1.

So, what will separate the cancer antibodies AnaptysBio is developing from the rest of the crowd? Suria cited a few key features:

  • Suria said its somatic hypermutation platform "allows us to generate therapeutic antibodies against difficult targets (such as TIM-3), which is achieved by generating and screening unprecedented diversity in rapid, high-throughput manner." In its statement, Tesaro said TIM-3 works as a pattern-recognition receptor that dampens the antitumor immune response. Preclinical studies show that antibodies that block the TIM-3 receptor may enhance the antitumor immune response when combined with an anti-PD-1 agent.
  • Suria said the AnaptysBio platform also maximizes potency, meaning, in theory, a therapeutic effect could be achieved at lower antibody doses.
  • "In addition," Suria said, "our antibodies are optimized for manufacturability parameters (e.g. production yield and stability in storage), such that production is not a limiting factor for their success."

The first clinical trial from the collaboration is estimated to begin in the second half of 2015, with additional candidates following every one or two quarters after that.

This article originally appeared on Xconomy, along with: