Celgene (CELG) - Get Report and Agios Pharmaceuticals (AGIO) - Get Report have expanded an existing partnership to include early research into "metabolic immuno-oncology" while also parting ways on one of Agios' late-stage blood cancer drugs, the companies said Tuesday.

Under the new partnership terms, Celgene is paying $200 million upfront for opt-in development rights to early research Agios is conducting into new drug targets that alter the metabolism of immune cells to help kill cancer cells.

This research is still in the preclinical stage and Agios isn't disclosing details about specific targets or how long it might take any drugs to reach human testing. For its $200 million, Celgene gains the right to acquire 50% ownership of metabolic immuno-oncology drugs which might emerge from this Agios program.

Celgene and Agios also re-worked their 2010 partnership which was set to expire on June 1. Celgene gave back to Agios the ex-U.S. marketing rights to the blood cancer drug AG-120. This drug is now wholly owned by Agios. Celgene keeps worldwide rights to AG-221 and half ownership of AG-881.

Celgene and Agios are also now splitting ownership of drugs which might emerge from Agios' research into MTAP, a metabolic enzyme deleted in approximately 15% of all cancers. Agios is working on small molecule inhibitors of MTAP which have shown tumor-shrinking effects in animals. Preclinical work on a specific MTAP drug is expected to start this year. Agios said.

With the new Celgene upfront payment, Agios has $556 million on hand. The company expects to finish 2016 with more than $390 million and has extended its cash runway to the middle of 2018.

A phase II study of AG-221 in relapsed/refractory acute myelogenous leukemia which could support the drug's approval is now fully enrolled. A similar study of AG-120 is expected to reach full enrollment by the end of 2016.

Agios will be presenting new clinical data from two drugs under development for a rare genetic metabolic disease at the European Hematology Association annual meeting in June.

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