Pfizer (PFE - Get Report) has licensed from Avant Immunotherapeutics an experimental brain cancer vaccine, the two companies announced Wednesday.

The Big Pharma company will pay Avant $40 million in cash upfront and make a $10 million equity investment in the micro-cap biotech company in exchange for worldwide rights to CDX-110, a therapeutic vaccine that targets a defective protein thought to promote the growth of cancer cells.

CDX-110 is the lead pipeline drug from Celldex Therapeutics, a privately held biopharmaceutical firm that recently merged with Avant. The drug is currently being tested in a phase II study in patients with glioblastoma multiforme, a severe form of brain cancer.

In addition to the combined $50 million upfront investment, Avant is eligible to receive milestone payments totaling $390 million tied to the successful development and approval of CDX-110. Pfizer is taking over all development costs for CDX-110 and will pay double-digit royalties to Avant on the sales of the drug, if the drug's approved.

CDX-110 is a cancer immunotherapy, or vaccine, that trains the body's immune system to target a protein called EGFRvIII, a mutation of the epidermal growth factor receptor that, itself, is the target for cancer drugs like ImClone System's ( IMCL) Erbitux.

Unlike EGFR, which is found on healthy and cancerous cells, the mutant EGFRvIII is only expressed in cancer cells, which potentially makes it a more specific target for immunotherapies like CDX-110.

About 40% of glioblastoma multiforme (GBM) tumors contain the mutant EGFRvIII molecule. There are roughly 10,000 new cases of GBM diagnosed in the U.S. every year. Other tumors that express EGFRVvIII include prostate, ovarian, breast and colon.

Two single-arm phase II studies of CDX-110, one monotherapy and the other in combination with the chemotherapy drug temozolomide, have shown prolongation of progression-free survival compared to historical controls, according to Avant/Celldex. Patients in these studies had GBM tumors expressing EGFRvIII that were removed during surgery, after which they were treated with radiation and given doses of CDX-110.

To confirm those early data, Avant has started a randomized phase II/III study of CDX-010 in which 90 GBM patients with resected tumors that expressed EGFRvIII will receive either a combination of CDX-110 and temozolomide or temozolomide alone. The goal of the phase II portion of the study will be to see if treatment with CDX-110 can prolong the time that patients remain cancer-free. Results are expected by the end of 2008 or early 2009.

If the phase II portion of the study is successful, Avant and Pfizer will enroll another 285 patients for the phase III portion of the study.

Celldex was a spinoff of Medarex . The company attempted to go public on its own in 2004 but pulled its registration statement in 2005. Celldex then merged with Avant last October.

Avant shares were trading up 1.5% to $10.20 in recent after-hours trading Wednesday.

Adam Feuerstein writes regularly for TheStreet.com. In keeping with TSC's editorial policy, he doesn't own or short individual stocks, although he owns stock in TheStreet.com. He also doesn't invest in hedge funds or other private investment partnerships. Feuerstein appreciates your feedback; click here to send him an email.