Bristol-Myers Squibb has signed an immuno-oncology pact with Five Prime Therapeutics which could be worth several hundred millions of dollars to the US biotech.

The firms will work together to develop therapies directed toward targets identified in two undisclosed immune checkpoint pathways using Five Prime’s platform. Under the terms of the deal, B-MS will pay an upfront fee of $20 million and provide up to $9.5 million in research funding.

The US major is also buying a 4.9% stake in Five Prime for $21 million, representing a 30% premium on the latter's share price, which unsurprisingly leapt on the news. Five Prime will be eligible to receive up to $300 million in milestones per collaboration target and tiered royalty payments.

Candidates developed against these new and existing targets may be studied either as single agents or in combination with existing or potential immuno-oncology therapies, B-MS added. Chief scientific officer Francis Cuss said this area "has the potential to be transformational in the treatment of cancer", and B-MS "has an extensive clinical pipeline and discovery programmes dedicated to maximising this field of research".

Five Prime chief executive Lewis Williams added that the alliance "is evidence that our protein discovery platform is ideally suited to identify novel immune checkpoint targets for the development of next-generation immuno-oncology therapeutics".

To date, Five Prime has received more than $220 million from seven collaborations, notably with GlaxoSmithKline, as well as Pfizer, Boehringer Ingelheim and UCB.