Japanese pharmaceutical company Astellas Pharma Inc announced on Monday that it has formed a global strategic collaboration with Vir Biotechnology Inc (Nasdaq:VIR), a US-based, clinical-stage biopharmaceutical company.

The collaboration is intended to advance VIR-5500, an investigational PRO-XTEN dual-masked CD3 T-cell engager (TCE) targeting PSMA for the treatment of prostate cancer. It aims to accelerate the development of VIR-5500 and strengthen Astellas' oncology pipeline and prostate cancer programme.

Vir Biotechnology will receive USD335m in upfront and near-term payments, including USD240m in cash, USD75m in equity investment at a 50% premium, and a near-term USD20m milestone. Global development costs for VIR-5500 will be shared, with Astellas responsible for 60% and Vir Biotechnology responsible for 40% of all costs. Vir Biotechnology will continue the ongoing Phase 1 trial, until responsibility is transitioned to Astellas, after which Astellas will be responsible for all development activities. In the United States, Vir Biotechnology will have the option to co-promote VIR-5500 with Astellas, and profit/loss will be shared equally. Outside the US, Astellas will be exclusively responsible for commercialisation of VIR-5500. In addition, Vir Biotechnology is eligible to receive up to USD1.37bn in development, regulatory and sales milestones, along with tiered, double-digit royalties on ex-US net sales. Under the terms of Vir Biotechnology's licensing agreement with Sanofi, a portion of certain collaboration proceeds will be shared with Sanofi.

Closing of the transaction is contingent on customary closing conditions, including clearance under the Hart-Scott-Rodino (HSR) Act.