German firm Biotest AG signed on as the eighth collaborator to access ImmunoGen Inc.'s Tumor-Activated Prodrug (TAP) technology to develop antibody therapeutics in a deal that could provide ImmunoGen with up to $35.5 million in milestone payments.

Biotest gains exclusive rights to use the TAP platform with its BT-062 antibody to create drugs against multiple myeloma and other cancers. In addition to the milestones, the Dreieich, Germany-based company will pay ImmunoGen $1 million up front and would pay royalties.

The arrangement is similar to ImmunoGen's other deals with companies such as South San Francisco-based Genentech Inc.; Malvern, Pa.-based Centocor Inc.; and Cambridge, Mass.-based Biogen Idec Inc., but the Biotest partnership carries one crucial difference.

"For the first time, we have opt-in rights for the compounds that are developed," said Pauline Jen Ryan, senior vice president of corporate development and operations for ImmunoGen.

In lieu of royalties and certain milestone payments, the company can opt for a 50-50 U.S. co-development and commercialization agreement for any resulting compound. If ImmunoGen chooses that route, it would pay Biotest either $5 million or $15 million, depending on development status, and from there the companies will split evenly all costs and profits.

"All of our deals are focused on building value with our technology," Ryan told BioWorld Today, "and I think [that value] is being recognized."

She added that collaborations involving co-development opportunities are the sort of deals "we'd like to do going forward."

ImmunoGen's TAP technology is designed to work with monoclonal antibodies - either belonging to ImmunoGen or its collaborators - that might bind to cancer cells but have little to no therapeutic effect of their own. By attaching a cell-killing agent to the antibody, the TAP technology produces a compound aimed at providing targeted treatment to cancer cells, giving the antibody "the efficacy that it otherwise wouldn't have had," Ryan said.

"Or, if it has an effect on its own, we can potentiate that effect," she added.

By out-licensing the technology for use with companies' antibodies, ImmunoGen not only broadens TAP's application, but also brings in a stream of revenue to support its own internal development. For the three months ending March 31, the company reported revenues of $9.4 million, the majority of that coming from research and development support fees and licensing and milestone payments.

"It's been a very successful business model for us," Ryan said.

ImmunoGen is moving forward with its own pipeline, led by huN901-DM1, a TAP compound comprising the company's CD56-targeting antibody and DM1 cell-killing agent.

HuN901-DM1 is in three trials: the Phase II stage of a Phase I/II trial in relapsed small-cell lung cancer patients, a Phase I study in CD56+ solid tumors, including small-cell lung cancer, and a Phase I study in multiple myeloma.

Behind that product is huC242-DM4, which is in Phase I testing in patients with refractory CanAg-expressing cancers, such as colorectal, pancreatic, gastrointestinal and many non-small-cell lung cancers.

ImmunoGen holds worldwide rights to both those products, though it might consider partnership opportunities down the road.

"We'd like to have the flexibility to retain them if we choose, or partner them at a later stage," Ryan said.

The Cambridge, Mass-based company posted a net loss of $3 million, or 7 cents per share for the first three months of 2006. As of March 31, it had cash and marketable securities of $82.8 million.

Shares of ImmunoGen (NASDAQ:IMGN) closed at $3.14 Tuesday, up 9 cents.