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ITeos Higher on Cancer-Drug Deal With Glaxo

iTeos and Glaxo unveiled a deal to co-develop and co-commercialize EOS-448, a drug in development to treat cancer.

ITeos Therapeutics  (ITOS) - Get Report shares leaped on Monday after the drug developer said GlaxoSmithKline  (GSK) - Get Report would pay up to $2.1 billion for it to develop cancer drugs.

The Cambridge, Mass., company and Glaxo unveiled a deal to co-develop and co-commercialize EOS-448, a monoclonal antibody in Phase 1 development as a potential treatment for patients with cancer.

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iTeos shares recently traded at $27.55, up 38%. The stock 8% over the past six months. American depositary receipts of Glaxo, the London health-care giant, recently traded at $40.31, up 0.4%.

Under terms of the deal, iTeos will receive a $625 million up front. ITeos will then be eligible to receive as much as $1.45 billion in milestone payments.

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Glaxo and iTeos will share the responsibility and costs for developing EOS-448 and will jointly commercialize and equally split profits in the U.S., the companies said.

Overseas, Glaxo will receive an exclusive license for commercialization, and iTeos will receive tiered royalty payments.

EOS-448 is currently in an open-label Phase 1 study in patients with advanced solid tumors. Glaxo and iTeos plan to start combination studies of EOS-448 with Glaxo’s dostarlimab in 2022.

In other Glaxo news, the company’s shares rose in April after Bloomberg and the Financial Times reported that activist investment firm Elliott Management had acquired a large stake in the pharmaceutical heavyweight.

Glaxo, after lagging competitors for years, is set to jettison its consumer health unit next year.

In March, the company said Moncef Slaoui was fired as chairman of a bioelectronic medicine unit after an inquiry substantiated allegations of sexual harassment against him.