AstraZeneca and MedImmune, AZ’s global biologics R&D arm, have entered into an exclusive collaboration agreement with Celgene for the development and commercialization of MEDI4736 across a range of blood cancers including non-Hodgkin's lymphoma, myelodysplastic syndromes and multiple myeloma.

MEDI4736 is an investigational immune checkpoint inhibitor, directed against programmed cell death ligand 1 (PD-L1). Signals from PD-L1 help tumors avoid detection by the immune system. MEDI4736 blocks these signals, countering the tumor’s immune-evading tactics. MEDI4736 will be assessed both as monotherapy and in combination with other AZ and Celgene potential and existing cancer medicines. Over time, the collaboration could expand to include other assets.

Celgene will make an upfront payment of $450 million to AZ. Celgene will lead on development across all clinical trials within the collaboration and will take on all research and development costs until the end of 2016, after which they will take on 75% of these costs. Celgene also will be responsible for global commercialization of approved treatments. AZ will continue to manufacture and book all sales of MEDI4736 and will pay a royalty to Celgene on worldwide sales in hematological indications. The royalty rate will start at 70% and will decrease to approximately half of the sales of MEDI4736 in hematological indications over a period of four years.

"The potential of rationally combining immunotherapies such as MEDI4736 with existing and novel hematology compounds creates new opportunities for patients with blood cancers to live longer, better lives," said Jacqualyn A. Fouse, Ph.D., president, global hematology and oncology for Celgene.

The collaboration agreement will become effective upon the expiration or termination of applicable waiting periods under all applicable antitrust laws, if any, and is expected to become effective in the second quarter of 2015.