AbbVie (NYSE:ABBV) has signed a collaboration agreement with Chinese clinical-stage biotechnology company I-Mab (NASDAQ:IMAB) for the development and commercialization of lemzoparlimab, a monoclonal antibody in early-stage clinical testing that could be used to treat various cancers. The antibody targets CD47, a protein that is overexpressed on the surface of many types of cancer cells and delivers a "don't eat me" signal to the body's immune system.

Under the terms of the agreement, AbbVie will pay I-Mab $200 million now and up to $1.74 billion in milestone payments in the future. AbbVie will get an exclusive license to commercialize lemzoparlimab globally excluding greater China, paying tiered royalties in low- to mid-teen percentages of sales. I-Mab will have the right to commercialize the drug in mainland China, Hong Kong, and Macau.

Handshake with Chinese and American flags in background

Image source: Getty Images.

The collaboration potentially involves exploring the combination of lemzoparlimab with AbbVie's blood cancer drug Venclexta. On a conference call with analysts, I-Mab said that AbbVie will have the option of collaborating with the biotech on other CD47 antibody treatments, including two preclinical drug candidates in I-Mab's pipeline with potential deal value of another $1 billion. On the call, I-Mab said, "In terms of total deal value, we believe that this is the largest out-licensing and global partnership transaction ever executed by a Chinese biotech company."

Drugs targeting CD47 are a hot item in immuno-oncology now, with Gilead Sciences paying a stunning $4.9 billion to acquire small biotech Forty Seven earlier this year. I-Mab believes lemzoparlimab is superior to its competition because it minimizes binding to red blood cells, a problem with other CD47 antibodies. This may be the reason AbbVie passed up a deal with domestic biotech Trillium (NASDAQ:TRIL), whose shares fell on the news.