Relay Therapeutics [NASDAQ: RLAY] revealed that the company inked a contract with Genetech. Both the companies agreed on the development and commercialization of RLY-1971. The drug is a strong inhibitor of SHP2. The drug is a possible pillar to serve in combination therapy to treat various tumors.
Genetech will take charge of the development of RLY-1971 with the possibility of expanding the drug into multiple combination studies. According to the terms of the worldwide license and collaboration agreement, Relay will receive a $75 million payment. The company is further eligible to receive $25M in additional payment. Relay has an option of a 50/50 profit/cost-share on the drug. The company will be eligible to receive a 50% profit from U.S sales. It will also receive $410M in additional payment and royalties on net sales if it opts for it.
If Relay chooses otherwise, the company will be eligible to obtain $695M in additional development, commercialization, and royalties on net sales. Relay still holds the right to combine with it’s FGFR2 and PI3Kα programs.