MacroGenics, Zai Lab Ink Over $1.4B Immuno-Oncology Development Deal

MacroGenics Inc MGNX and Zai Lab Limited ZLAB have entered into an exclusive collaboration and license agreement involving up to four immuno-oncology molecules.
The first collaboration program covers a lead research molecule that incorporates MacroGenics' DART platform and binds CD3 and an undisclosed target expressed in multiple solid tumors.
The second collaboration program will cover a target to be designated by MacroGenics.
Zai receives commercial rights in Greater China, Japan, and Korea and MacroGenics receives commercial rights in all other territories for both molecules.
Zai Lab receives an option upon reaching a predefined clinical milestone for the lead molecule to convert the regional arrangement into a global 50/50 profit share.
Zai Lab will also get exclusive, global licenses for two additional molecules.
Under the terms of the agreement, MacroGenics will receive an initial payment of $55 million, including an upfront payment of $25 million and an equity investment of $30 million at $31.30/share.
In addition, MacroGenics is eligible to receive up to $1.4 billion in potential milestone payments for the four programs.
If products from the collaboration are commercialized, MacroGenics would also receive royalties on annual net sales in Zai Lab's territories.
Price Action: MGNX shares are up by 7.37% at $22 during the premarket session on the last check Wednesday, while ZLAB closed at $166.1 on Tuesday.