On September 21, 2018 XOMA Corporation (NASDAQ: XOMA), reported that for $15.0 million, it has acquired from Agenus (NASDAQ: AGEN) a partial interest position in the rights to potential milestone and royalty payments associated with seven immuno-oncology antibodies currently being developed by Merck and Incyte under their collaborations with Agenus (Press release, Xoma, SEP 21, 2018, View Source [SID1234529553]).

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"This is an important deal reflecting our new royalty-aggregator strategy to acquire milestone and royalty payments associated with therapeutic candidates partnered by others. The basket of Agenus immuno-oncology assets is advancing in the hands of two of the leading companies in oncology drug development," said Jim Neal, Chief Executive Officer at XOMA. "These assets possess all the characteristics we have established for our business model: outstanding development partners, mid-stage to early stage assets, important therapeutic categories, and sizable royalty commitments. We believe this investment could generate potential future cash flows over an extended period from milestones and royalties on some exciting potential commercial opportunities."

The seven royalty interest antibodies are:

One Phase 1 antibody being developed by Merck on an undisclosed novel target;

Incyte’s INCAGN1876, a GITR agonist in Phase 1/2 studies;

Incyte’s INCAGN1949, an OX-40 agonist in Phase 1/2 studies;

Incyte’s INCAGN2385, a LAG-3 antagonist in Phase 1 studies;

Incyte’s INCAGN02390, a TIM-3 antagonist expected to enter the clinic in 2018; and,

Two preclinical antibodies being developed by Incyte on undisclosed targets.

Under the terms of the agreement, XOMA will receive low- to mid-single-digit royalties on future sales of these seven immuno-oncology assets. Additionally, XOMA is entitled to a portion of milestone payments associated with the assets. XOMA has drawn $7.5 million from its line of credit with Silicon Valley Bank ("SVB") to partially fund this transaction.