Shares of Zymeworks (NYSE: ZYME) were soaring 17% higher as of 10:54 a.m. ET on Wednesday. The big jump came after Zymeworks and Jazz Pharmaceuticals (NASDAQ: JAZZ) announced an exclusive licensing deal for zanidatamab. Jazz will pick up development and marketing rights for Zymeworks' bispecific antibody therapy that targets HER2-expressing cancers in all territories, except in Asia/Pacific, where Zymeworks already has licensed the drug.

Jazz will fork over an up-front payment of $50 million to Zymeworks once the transaction is approved by regulators. After the results from the Herizon-BTC-01 clinical study of zanidatamab are reported, Jazz could pay another $325 million to Zymeworks if it chooses to continue the collaboration.

In addition, Zymeworks will be eligible to receive regulatory milestones of up to $525 million, as well as up to $862.5 million related to commercial milestones. Jazz also agreed to pay tiered royalties to Zymeworks of between 10% and 20% of net sales if zanidatamab is ultimately approved and marketed.

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Source Fool.com