One of the largest drugmakers in the U.S. is partnering with a Danish firm to develop antibody-based therapies in oncology.

Chicago-based AbbVie and Copenhagen-based Genmab said Wednesday that they had formed the partnership that will focus on bispecific antibodies, a kind of immunotherapy, across hematological and solid tumor cancers.

Under the terms of the deal, AbbVie will pay Genmab $750 million upfront, along with up to $3.15 billion in milestone payments.

Shares of Genmab were up 4.6% Wednesday afternoon on Nasdaq Nordic’s Copenhagen exchange, trading at around 1,968 Danish kroner ($300) per share following the news. Shares of AbbVie were up more than 2% on the New York Stock Exchange shortly after markets opened.

The partnership focuses on three bispecific antibody development programs: epcoritamab, which targets the cell-surface antigen CD20 as well as CD3 on T cells; DuoHexaBody-CD37; and DuoBody-CD3x5T4. They will additionally partner on discovery research.

The companies will split commercial responsibilities in the U.S. and Japan for epcoritamab, while AbbVie will be responsible for further globalization, with Genmab booking net U.S. and Japanese sales and receiving tiered royalties for other territories. The companies will then share global development and commercialization for the other two antibodies, while sharing commercialization responsibilities for the U.S. and Japan. For the discovery research partnership, Genmab will conduct Phase I studies, while AbbVie will have opt-in rights.

Epcoritamab and DuoHexaBody-CD37 are in Phase I development for hematological malignancies. Two drugs whose development Genmab had a hand in are currently approved: Johnson & Johnson’s CD38-targeting Darzalex (daratumumab), for multiple myeloma, and Novartis’ CD20-targeting Arzerra (ofatumumab), for non-Hodgkin’s lymphoma.

Bispecific antibodies work by targeting antigens on the surfaces of cancer cells, e.g. CD20 in non-Hodgkin’s lymphoma, and then targeting T-cell antigens, especially CD3, in order to direct the T cells to the cancer cells and induce the former to kill the latter. Amgen’s Blincyto (blinatumomab) is an example of an approved bispecific antibody, targeting CD19 in patients with acute lymphoblastic leukemia.

In a note to investors, RBC Capital Markets analyst Kennen MacKay wrote that the deal “brings [Genmab] everything they sought and more,” pointing to four of what he called “significant wins.” These include a larger-than-expected upfront payment to Genmab; favorable sales terms, particularly for epcoritamab; AbbVie’s strength as a well-funded hematology-oncology partner; and validation for the other two product candidates, which MacKay called “otherwise overlooked.”

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