Astellas Pharma Inc. (TSE: 4503), a Japan-based pharmaceutical company, announced on Monday that it has entered into a worldwide, strategic collaboration and licensing agreement with United States-based Sutro Biopharma, Inc. (NASDAQ: STRO), for the discovery and development of novel immunostimulatory antibody-drug conjugates (iADCs).

It is claimed that this partnership will enable Astellas and Sutro to mutually leverage strengths in their respective fields to accelerate iADC development for three distinct biological targets; Sutro will engage in research and preclinical studies to identify candidate compounds and then Astellas will pursue clinical development. Sutro has advanced technologies for linking drugs to antibodies and proprietary component parts, including candidate antibodies and linkable cytotoxins and immunostimulatory molecules. For development of iADCs, Astellas will utilise the strength of its global R&D and commercialisation capabilities in the area of antibodies and the small molecular components. These iADCs may have the potential to provide new therapeutic options for treatment of cancers for which no broadly effective therapy is currently available.

Sutro is to receive an upfront cash payment of USD90m to develop iADCs for three biological targets and is likely to be eligible to receive up to USD422.5m in development, regulatory and commercial milestones for each product candidate, and tiered royalties ranging from low double-digit to mid-teens on global sales of any commercial products that are likely to result from the partnership, subject to Sutro's cost and profit-sharing option for the United States. Sutro also has the option to share in the costs and profits for developing and commercialising product candidates in the United States and if it exercises this option for a particular product candidate, both companies will equally share the costs of such co-development and co-commercialisation, with the resulting profits/losses from co-commercialisation also shared equally in the United States.