Novartis adds bispecific antibodies to its growing immuno-oncology portfolio through collaboration and licensing agreement with Xencor

• Agreement is the latest in a series of acquisitions and strategic collaborations that have bolstered Novartis' deep and diverse immuno-oncology pipeline
   
• Collaboration will co-develop Xencor's two T-cell engaging bispecific antibodies targeting acute myeloid leukemia and B-cell malignancies
   
• Novartis receives rights to develop four additional programs and the right to use Xencor's antibody engineering platform to develop up to ten additional antibodies for immuno-oncology and other diseases

             
Basel, June 28, 2016 - Today Novartis announced that it has entered into a collaboration and licensing agreement with Xencor for the development of bispecific antibodies for treating cancer. The agreement is the latest in a series of acquisitions and strategic collaborations between Novartis and biotech companies that have helped bolster its deep and diverse immuno-oncology pipeline.

Traditional monoclonal antibodies target and bind to a single antigen. Bispecific antibodies are engineered to recognize and target two different antigens, which makes them potentially more effective in targeting complex diseases. A T-cell engaging bispecific antibody is able to bind an antigen on a tumor cell with one arm and engage T-cells capable of their destruction with the other.   

Novartis receives the right to develop four additional bispecific antibodies and to use other Xencor proprietary antibody engineering technology for up to ten additional biotherapeutic programs across the Novartis R&D portfolio.  In addition, The companies will collaborate to co-develop Xencor's two bispecific T-cell engaging antibodies targeting CD3xCD123 and CD3xCD20 for the treatment of acute myeloid leukemia and B-cell malignancies.

"This collaboration is part of our strategy to join forces with technology innovators who can help us rapidly advance new medicines to the clinic, " said Jay Bradner, President of the Novartis Institutes for BioMedical Research. "We look forward to working with the Xencor team to advance these programs in immuno-oncology and to using their antibody engineering platform to develop biotherapeutics for additional diseases."   

The addition of Xencor's T-cell engaging bispecific antibody programs expands Novartis' immuno-oncology portfolio that includes novel checkpoint inhibitors, chimeric antigen receptor T-cell (CART) technology, myeloid cell targeting agents, the T-cell stimulating factor IL-15, STING agonists that enhance immune recognition of cancers, and adenosine receptor antagonists and TGF-beta blocking antibodies that overcome immunosuppression in the tumor microenvironment. Currently seven of these programs are in the clinic and five more are expected to enter the clinic individually and as combinations by the end of 2016.

Under the terms of the agreement, Xencor is receiving a $150 million upfront payment from Novartis and the two companies will equally share the cost to jointly develop two Xencor antibodies targeting the CD3 domain.  Xencor retains full US commercial rights to these programs, and Novartis has ex-US commercial rights. In addition to these antibodies, Novartis receives worldwide rights to develop and commercialize four additional bispecific programs, with Xencor eligible to "opt in" to one of these programs in the U.S..

Disclaimer
The foregoing release contains forward-looking statements that can be identified by words such as "growing," "pipeline," "will," "strategic," "potentially," "strategy," "can," "look forward," "expected," or similar terms, or by express or implied discussions regarding potential marketing approvals for the two bispecific antibodies to be co-developed under the collaboration with Xencor, and the other clinical and pre-clinical candidates in the Novartis immuno-oncology pipeline, or regarding potential future revenues from such product candidates. You should not place undue reliance on these statements. Such forward-looking statements are based on the current beliefs and expectations of management regarding future events, and are subject to significant known and unknown risks and uncertainties. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those set forth in the forward-looking statements. There can be no guarantee that either of the two bispecific antibodies to be co-developed under the collaboration with Xencor, or any of the other clinical and pre-clinical candidates in the Novartis immuno-oncology pipeline, will be submitted or approved for sale in any market, or at any particular time. Neither can there be any guarantee that Novartis will exercise its right to develop any of the four additional bispecific antibodies under the collaboration and licensing agreement with Xencor, or that such antibodies will be submitted or approved for sale in any market, or at any particular time. Nor can there be any guarantee that any such product candidates will be commercially successful in the future. Neither can there be any guarantee that Novartis will use Xencor's proprietary antibody engineering technology to develop any additional Novartis biotherapeutic programs, or that such use will be successful or achieve the desired outcome. Nor can there be any guarantee that the collaboration and licensing agreement with Xencor will otherwise be successful or achieve its goals. In particular, management's expectations regarding the two bispecific antibodies to be co-developed with Xencor, the additional antibodies and technology subject to the collaboration and licensing agreement with Xencor, the outcome of the collaboration and licensing agreement, and the other clinical and pre-clinical candidates in the Novartis immuno-oncology pipeline could be affected by, among other things, the uncertainties inherent in research and development, including unexpected clinical trial results and additional analysis of existing clinical data; unexpected regulatory actions or delays or government regulation generally; the company's ability to obtain or maintain proprietary intellectual property protection; general economic and industry conditions; global trends toward health care cost containment, including ongoing pricing pressures; unexpected safety, quality or manufacturing issues, and other risks and factors referred to in Novartis AG's current Form 20-F on file with the US Securities and Exchange Commission. Novartis is providing the information in this press release as of this date and does not undertake any obligation to update any forward-looking statements contained in this press release as a result of new information, future events or otherwise.

About Novartis
Novartis provides innovative healthcare solutions that address the evolving needs of patients and societies. Headquartered in Basel, Switzerland, Novartis offers a diversified portfolio to best meet these needs: innovative medicines, eye care and cost-saving generic pharmaceuticals. Novartis is the only global company with leading positions in these areas. In 2015, the Group achieved net sales of USD 49.4 billion, while R&D throughout the Group amounted to approximately USD 8.9 billion (USD 8.7 billion excluding impairment and amortization charges). Novartis Group companies employ approximately 118,000 full-time-equivalent associates. Novartis products are available in more than 180 countries around the world. For more information, please visit http://www.novartis.com.

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