US-based biopharmaceutical firm Baxalta has agreed to pay Danish biotech firm Symphogen up to $1.6bn for the rights to co-develop six experimental cancer drugs.

As part of the immuno-oncology collaboration, the companies will advance new therapeutics against six checkpoint targets, with the first programme to enter clinical studies in 2017.

On a product-by-product basis, following successful completion of Phase I clinical trials, Baxalta will have exclusive option rights to complete late-stage development and worldwide commercialisation.

In exchange for the exclusive option rights for six checkpoint therapies, Symphogen will receive an upfront payment of $175m from Baxalta, in addition to potential future milestone payments and royalties.

"This collaboration allows us to actively advance one of the most innovative areas of this field."

Baxalta Oncology executive vice-president and president David Meek said: "This exciting partnership aligns well to Baxalta’s strategy to invest in immuno-oncology and build an innovative portfolio of immunotherapies.

"With the expertise Symphogen offers in this category and their broad portfolio of early-stage immuno-oncology programmes, this collaboration allows us to actively advance one of the most innovative areas of this field.

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"For Baxalta, this is just the beginning of our focus in building world-class capabilities in immuno-oncology."

The deal will see Symphogen responsible for performing R&D through Phase I clinical trials at its own expense.

Immuno-oncology is a highly attractive area of research that is generating promising new therapeutic advances.

According to Symphogen, the collaboration also provides strong validation for its antibody approach and capabilities within the exciting field of immuno-oncology therapy.

It is reported that Baxalta is in advanced talks for Dublin-based Shire to take it over in a deal worth up to $32.6bn.

In August last year, Shire proposed to pay $45.23 per Baxalta share.

According to Shire, the combination will provide platform for growth, with more than 30 planned product launches and rare diseases portfolio with around 50 projects.