ImmunoGen, Inc. (NASDAQ:IMGN) announced on Monday that it has signed a deal with Takeda Pharmaceutical that gives the Japanese firm exclusive rights to two cancer drugs developed with ImmunoGen’s antibody-drug conjugate, or ADC, technology.

Reacting to the announcement, Waltham, MA-based ImmunoGen’s shares rose 21% in premarket trading Monday morning.

ImmunoGen

ImmunoGen cuts deal with Takeda

The deal would see the biotechnology company receiving $20 million upfront and potential milestone payments of as much as $210 million per target. Takeda also has the option to take a license for a third target for an additional upfront fee. If the Osaka-based firm exercises the option, it would pay an unspecified additional fee. Takeda will handle all of the development, manufacturing and commercialization of any drugs that come out of the deal.

Unlike in traditional chemotherapy, where cancerous and healthy cells are destroyed during cancer treatment, Immunogen’s ADC technology includes cancer-killing agents that are attached to an antibody that can be directly transported to affected cells. This targeted therapy helps to reduce side-effects that are common in chemotherapy.

Similarly to other pharma giants including Roche, Bayer and Novartis, Takeda has bought itself a license to ImmunoGen’s technology for up to two targets, in return for an upfront payment of $20 million for each.

Only three ADCs approved in the U.S.

ImmunoGen rose into prominence after its role in making a “smart bomb” cancer drug that Roche subsidiary Genentech sells for breast cancer. The biotechnology company is hoping to repeat its performance with Takeda.

Though ADCs represent a promising way to target cancer, they haven’t led to a sea change in cancer drug development. So far only three ADCs have been approved in the U.S. (including Kadcyla), and one was taken off the market for safety reasons. Seattle Genetics’s brentuximab vedotin (Adcetris) is the only other ADC currently sold in the U.S.

Interestingly, ImmunoGen hasn’t been as successful with its own-in-house work. ImmunoGen played a role in the development of the Roche breast cancer drug ado-trastuzumab emtansine (Kadcyla). The Roche drug is one of the few approved drugs from a class of therapeutics called antibody-drug conjugates, which combine the targeting ability of an antibody with a toxin, creating something of a “smart bomb” effect on tumors.

ImmunoGen receives royalties from Kadcyla sales. However, the Waltham, MA-based firm’s shares were battered a few months ago when Roche delivered disappointing news from a trial testing the drug with another breast cancer drug, pertuzumab (Perjeta).

Last year, ImmunoGen’s shares plummeted over 8.5% following Morgan Stanley declaring that its key product, Kadcyla, has no upside.

Thus, today’s announcement is welcome news for ImmunoGen as it gives the company a few more shots in getting its technology to market.

Exuding confidence over the latest deal, Daniel Junius, ImmunoGen President and CEO said: “Takeda shares our commitment to developing novel anticancer therapies that meaningfully improve the lives of patients, and we look forward to collaborating with them to create important new ADC product candidates”.

Last month, ValueWalk detailed how cutting-edge science abounds across healthcare industry. We highlighted how Immuno-oncology uses a patient’s own immune system to fight tumors, a highly selective, more efficacious treatment with reduced toxicity.