Bristol Myers-Squibb (NYSE:BMY) and Celldex (NASDAQ:CLDX) agreed to team up in a phase 1/2 study combining nivolumab (Bristol's PD-1 immuno-oncology candidate) and varlilumab. The study will cover several tumor types, potentially including metastatic melanoma, colorectal, ovarian, and non-small cell lung cancer. Bristol paid $5 million up front for the trial and is also splitting the costs of conducting the trial with Celldex. Bristol also gains the right of first negotiation if Celldex decides to license varlilumab.

In this video, from Wednesday's Market Checkup, the Motley Fool's health care-focused investing show, health care analysts Michael Douglass and David Williamson look at the partnership and the potential benefits for both parties.

David Williamson has no position in any stocks mentioned. Michael Douglass has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.