Novartis has signed a collaboration and licensing deal with California biotech Xencor for access to its bispecific antibody technology and rights to develop and commercialise two of the latter's flagship experimental therapeutics.

The deal, reportedly potentially worth more than $2.4 billion, gives Novartis global rights (ex US) to XmAb14045, which is expected to begin clinical development for acute myeloid leukaemia in 2016, and XmAb13676, which should enter clinical development for B-cell malignancies also this year.

The parties will work together and share development costs for the these drugs, and Novartis also gets global rights to Xencor's bispecific technology to develop and commercialise four additional targets, and a non-exclusive license to use Xencor's XmAb Fc technologies in up to ten molecules.

In return, the US biotech stands to receive a $150 million upfront payment and is eligible for clinical, regulatory and sales milestone payments for successful programmes, as well as tiered, low double-digit royalties for sales of XmAb14045 and XmAb13676 outside of the US, mid single-digit tiered royalties for worldwide sales of the four proprietary Novartis bi-specific molecules, and low single-digit royalties on Novartis molecules incorporating Xencor's XmAb Fc technology.

"This opportunity to work with and learn from a world leader in the late-stage development and commercialisation of immune-oncology drugs gives us the opportunity to take our lead drugs through clinical development and into commercialisation in the US and, with the other molecules to be developed, continues to expand the reach of our technology," noted Bassil Dahiyat, president and chief executive of Xencor, explaining his firm's interest in the deal.