Japanese pharmaceutical company Astellas Pharma Inc (TSE:4503) and Australian biotechnology company Audax Biosciences Pty Ltd announced on Tuesday that they have entered into an exclusive option and licence agreement for DAX-044, Audax's lead immuno-oncology AVIKINE candidate.

Under the agreement, Astellas receives an exclusive option for a worldwide licence to develop, manufacture and commercialise DAX-044. Audax has the option to co-fund and co-promote DAX-044 in Australia and New Zealand.

DAX-044 is an investigational, immune-targeted interleukin-12 (IL-12) antibody-cytokine fusion, designed with AVIKINE technology to concentrate IL-12's immune-activating activity within the tumour microenvironment while limiting the systemic toxicity that has historically constrained IL-12-based therapy. DAX-044 has demonstrated a potential best-in-class therapeutic index for an IL-12 agent in preclinical studies and is currently in IND/CTN-enabling development.

Under the terms of the agreement, Audax will receive upfront and potential future option exercise payment totalling USD285m and continue development of DAX-044 into a Phase 1 study expected to commence in 2027. On exercising its option, Astellas will assume sole responsibility for global development, manufacturing and commercialisation, with Audax having the option to co-fund and co-promote DAX-044 in Australia and New Zealand. In addition, Audax will be eligible to receive development and commercial milestone payments of up to USD1.05bn, as well as tiered double-digit royalties on worldwide net sales of DAX-044, if approved.

Exercise of the option is subject to customary conditions, including antitrust clearance.