What happened

Shares of Agenus (AGEN 3.43%) skyrocketed 20.6% on Tuesday. The big gain came after the company announced a deal to license bispecific antibody program AGEN1777 to Bristol Myers Squibb (BMY -0.18%)

So what

What really lit a fire under the biotech stock from today's news was just how much Bristol Myers Squibb was willing to fork over for rights to AGEN1777. The big drugmaker is paying Agenus $200 million upfront. Agenus also stands to receive up to $1.36 billion in milestones as well as tiered double-digit royalties on potential sales for the product.

Hands shaking in front of $100 bills

Image source: Getty Images.

AGEN1777 hasn't advanced into clinical testing yet. However, the experimental therapy has demonstrated promise in preclinical studies in treating tumors where anti-PD-1 or anti-TIGIT antibodies aren't effective by themselves. 

Now what

Agenus plans to file an Investigational New Drug (IND) application by June 30, 2021, to begin an early stage clinical study of AGEN1777. Bristol Myers Squibb expects to explore the use of the experimental therapy in treating non-small cell lung cancer as well as other high-priority indications.