What happened

Seattle Genetics (SGEN) shareholders outpaced a declining market in September as the stock jumped 24% compared to the S&P 500's 3.9% drop, according to data provided by S&P Global Market Intelligence.

That surge added to a broader rally for the biotech company; its shares are up by more than 70% so far in 2020.

A woman performs clinical research.

Image source: Getty Images.

So what

Early in the month, investors celebrated the news that Seattle Genetics is partnering with Merck & Co (MRK 0.38%) in two major oncology development programs. Merck will jointly develop and commercialize the biotech's breast cancer tumor treatment, and will assist it in its attempts to broaden the reach of its cancer-fighting drug, Tukysa. The two collaboration agreements included more than $700 million in upfront payments to Seattle Genetics, with the total size of the deal potentially exceeding $4 billion.

Now what

Merck has taken a 50% position in any future costs and profits for Seattle Genetics' breast cancer treatment, and has received exclusive rights to commercialize Tukysa outside of the U.S., Canada, and Europe. The company also purchased $1 billion of Seattle Genetics stock for $200 per share.

Investors pushed the stock above that level last month, an indication that they see the potential for even more value to come from this partnership in the coming years.