Jazz Pharmaceuticals (Nasdaq: JAZZ) and AbCellera (Nasdaq: ABCL) have entered a preclinical research collaboration, option and license agreement to discover and develop T-cell engaging multispecific antibodies targeting gastrointestinal cancers and other solid tumors.

Under the agreement, AbCellera will conduct discovery and early-stage research for two initial programs, with a commitment to begin a third program within 12 months. Jazz holds an exclusive option to develop and commercialize any resulting therapies on a worldwide basis.

AbCellera will receive $56 million in upfront payments for the first two programs, plus an additional $28 million upon initiation of the third program. If Jazz exercises its option for development, AbCellera is eligible to receive up to $792 million per program in option fees and milestone payments tied to development, regulatory, and commercial sales progress. AbCellera would also receive tiered royalties on net sales ranging from mid-single digits to low double-digits.

The two companies may also agree to initiate up to two additional programs, and AbCellera may conduct certain activities for investigational new drug-enabling studies and manufacture clinical supply under the collaboration.

Jazz Chief Scientific Officer for Oncology Josh Allen said the collaboration aligns with the company's focus on gastrointestinal cancers and its existing oncology expertise. AbCellera founder and CEO Carl Hansen said the partnership will leverage the company's T-cell engager platform, which includes proprietary CD3-binding antibodies, multispecific protein engineering technology, and high-throughput functional assays.