Bristol-Myers Squibb Company (BMY) - Get Report and Halozyme Therapeutics Inc. (HALO) - Get Report   Thursday morning announced a collaboration and license agreement to develop Bristol-Myers Squibb subcutaneously administered immuno-oncology medicines using Halozyme's Enhanze drug-delivery technology.

Halozyme will receive an initial $105 million for access to the Enhanze technology. Bristol-Myers Squibb has designated multiple immuno-oncology targets including programmed death 1 (PD-1) and has an option to select additional targets within five years from the effective date. The collaboration may extend to a maximum of 11 targets and could be worth more than $1.76 billion to Halozyme.

Halozyme shares were up 16.39%, or $2.16, to $15.34, in pre-market trading Thursday, Sept. 14.

Halozyme has the potential to earn milestone payments of up to $160 million for each of the nominated collaboration targets and additional milestone payments for combination products, subject to achievement of specified development, regulatory and sales-based milestones. In addition, Bristol-Myers Squibb will pay Halozyme royalties on sales of products using the Enhanze technology developed under the collaboration.

"We are excited to partner with Halozyme to pursue potential new approaches to how our medicines are delivered to patients," said Murdo Gordon, chief commercial officer, Bristol-Myers Squibb. "Through our work with Halozyme, we hope to improve the patient treatment experience by developing flexible and convenient treatment delivery options."

The Halozyme Enhanze technology is based on a proprietary recombinant human hyaluronidase enzyme (rHuPH20) that temporarily degrades hyaluronan -- a glycosaminoglycan or chain of natural sugars in the body -- to aid in the dispersion and absorption of other injected therapeutic drugs. This technology may allow for more rapid delivery of large volume injectable medications, such as medications that are currently delivered intravenously, through subcutaneous delivery (just under the skin).

Halozyme CEO Helen Torley noted that developing immuno-oncology medicines for hard-to-treat cancers is a major area of focus for Bristol-Myers.

"Bristol-Myers Squibb has one of the industry's most advanced and extensive immuno-oncology portfolios with a clear commitment to patient-centered innovation," she said. "Through this collaboration we are excited to explore the potential for Enhanze to expand the number of cancer patients who may receive their therapies as a rapidly administered subcutaneous injection."

The Enhanze drug-delivery technology is based on Halozyme's patented recombinant human hyaluronidase enzyme (rHuPH20), which has been shown to remove traditional limitations on the volume of biologics that can be delivered subcutaneously. By using rHuPH20, some biologics and compounds that are administered intravenously may instead be delivered subcutaneously. Enhanze may also benefit subcutaneous biologics by reducing the need for multiple injections. This delivery has been shown in studies to reduce health care practitioner time required for administration and shorten time for drug administration.

Separately, Halozyme also announced Thursday it has licensed Enhaze to Roche Holding Ltd.(ROG) - Get Report for exclusive development of an undisclosed therapeutic target. Halozyme will receive an initial $30 million with the potential to earn additional payments of up to $160 million subject to achievement of specified development, regulatory and sales-based milestones. Halozyme will also receive tiered, mid-single digit royalties on sales of commercialized products. Said Torley: "With each new licensing agreement, we see the potential for our global partners to advance their innovative therapies, reducing the treatment burden for patients, caregivers and payers through shorter administration times or a less frequent dosing regimen."

The Halozyme/Roche relationship dates back to the original global collaboration and licensing agreement for Enhaze signed in 2006.

On Thursday Halozyme also raised its financial guidance for 2017.

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