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What: After reporting a new collaboration with Amgen, Inc. (NASDAQ:AMGN) on Wednesday, shares in Advaxis, Inc. (NASDAQ:ADXS) continue to march higher today, gaining 11% at 11:30 a.m. EDT Wednesday.

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So what: News that the biotech giant Amgen is teaming up with Advaxis to develop ADXS-NEO caused Advaxis shares to spike Tuesday and Wednesday, investors continue to embrace Advaxis stock on the potential for future milestone payments.

ADXS-NEO is a preclinical cancer immunotherapy that seeks to supercharge a patient's immune system so that it can respond to mutations, or neoepitopes, identified within tumors. Amgen is contributing its immuno-oncology experience and Advaxis is contributing its research on neoepitopes. 

To secure global rights to ADXS-NEO, Amgen is paying Advaxis $40 million in cash upfront. It's also agreed to buy $25 million in Advaxis common stock. Amgen will be 100% responsible for funding clinical and commercial activities of the drug and Advaxis has the potential to get development, regulatory, and sales milestone payments of up to $475 million. If successfully commercialized, Amgen has agreed to pay Advaxis royalties in the high-single digit to mid-double digit range based on global sales.

"Amgen's collaboration with Advaxis leverages and enhances our development and commercialization expertise in novel immuno-oncology treatments," said Sean E. Harper, M.D., executive vice president of Research and Development at Amgen. "We look forward to partnering with Advaxis to advance this highly targeted and patient-specific treatment option for patients."

Now what: It's far from a slam dunk that this approach will prove effective and safe. Cancer research is notorious for having a high failure rate and ADXS-NEO approach is far from simple.

In clinical studies slated to begin next year, patient tumor DNA will be extracted and compared to normal cells to identify gene mutations for potential neo-antigens. Patient specific vectors that can immunize the immune system against neoepitopes will then be engineered, and then neoepitope peptides will be delivered directly into antigen presenting cells to stimulate an immune response.

The approach is intriguing, but it's in the earliest stages of development and a lot can go wrong from here. Because of that, investor optimism may be fueled less by how far along research is on ADXS-NEO and more by the fact that Amgen is acquiring shares in Advaxis. After all, that level of commitment in these collaborations isn't very common.