Benzinga | Jun 16, 2021 08:27AM EDT

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

* MacroGenics Inc (NASDAQ:MGNX) and Zai Lab Limited (NASDAQ: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.