Cytomx Therapeutics (CTMX) stock rocketed to a 14-month high Monday, breaking out after the small biotech expanded its immuno-oncology deal with heavyweight drugmaker Bristol-Myers Squibb (BMY).
The companies will explore up to eight additional immune system checkpoints, adding onto a May 2014 agreement for four oncology targets, Cytomx said in a press release. Under the deal, Bristol has advanced one drug to Investigational New Drug studies.
On the stock market today, Cytomx stock rose 24.4% to 18.89 after earlier soaring 31.9% to touch an 18-month high at 20.02. Shares broke out of a cup-with-handle formation, after hitting a buy point at 15.87. Bristol-Myers stock climbed 0.2% to 56.42.
Under the deal, Cytomx gave Bristol-Myers exclusive rights to develop and commercialize up to six oncology targets and two non-cancer targets using Cytomx's technology. Bristol will pay Cytomx $200 million upfront and provide research funding.
Cytomx will be eligible to receive up to $448 million in future development, regulatory and sales milestones, plus royalties of mid-single to low-double digits on Bristol's sales of each product commercialized under the agreement.
The deal capitalizes on Bristol-Myers' position in the immuno-oncology market where it is facing off against the likes of Merck (MRK), Roche (RHHBY), AstraZeneca (AZN) and Incyte (INCY).
IBD'S TAKE: Analysts say there are north of a thousand immuno-oncology drugs being tested right now. But only a small handful have been approved. Head to IBD's Technology page for the full list.
Immuno-oncology drugs teach the body's immune system to identify camouflaged cancer cells by targeting specific proteins. Those proteins are called checkpoints. In total, Bristol and Cytomx will be exploring up to 12 immuno-oncology checkpoints.
One particular checkpoint, called CTLA-4, has proved successful for Bristol. Yervoy targets the CTLA-4 protein. It is approved to treat melanoma that has spread or cannot be treated by surgery.
Cytomx and Bristol are working to move another CTLA-4 drug into clinical trials. The duo also has a drug that targets the PD-1 protein — similar to Bristol's Opdivo and Merck's Keytruda — in a combined phase 1 and 2 trial.
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