Sutro Biopharma, a San Francisco-based biopharmaceutical company, has formed a collaboration with Celgene, a multinational biopharmaceutical company, to design and develop novel antibody drug conjugates (ADCs) and bispecific antibodies for two undisclosed targets and to manufacture a proprietary Celgene antibody.

Sutro will receive a substantial upfront payment, an equity investment in the company and payments for the completion of research, development and regulatory milestones. If all programs are successful, the deal could be worth over $500 million to Sutro. The company is also eligible to receive royalties on product sales.

In the collaboration, Sutro will be responsible for product design and production of preclinical materials using the company's proprietary, cell-free protein synthesis technology. 

"We are pleased to work with Celgene on multiple programs that utilize a broad spectrum of Sutro's cell free protein synthesis technology and capabilities," said William Newell, CEO of Sutro Biopharma. "The scope of this partnership showcases our novel, cell-free approach to designing, developing and manufacturing next-generation ADCs and bispecific antibodies."

Thomas Daniel, M.D., president of global research and early development, Celgene, added, "We look forward to working with the team at Sutro and to exploring their platform's potential to accelerate the discovery and development of superior multifunctional biologics."

Four Oaks Partners advised Sutro on the transaction.