Anglo-Swedish drugmaker AstraZeneca is to collaborate with French biotech Transgene, part of Institut Mérieux, to discover and develop immunotherapies for treating cancers and infectious diseases.

The partners will develop five armed oncolytic vaccinia virus candidates using Transgene’s proprietary viral platform Invir.IO. AstraZeneca will select the transgenes to be encoded within the virus and be responsible for further in-vivo pre-clinical development. In addition and subject to exercising its options, the UK-headquartered pharma will also take responsibility for clinical development and commercialization of the novel oncolytic immunotherapies.

Under the terms of the deal, Transgene will receive $10 million from AstraZeneca upon signing as well as pre-clinical milestone payments of up to $3 million. The Strasbourg-based company is also eligible to receive payment on any candidate where AstraZeneca exercises its license option, as well as development and commercial milestone payments and royalties.

Commenting on the collaboration, Jean-Charles Soria, senior vice president, research & development oncology at AstraZeneca, said: “Oncolytic viruses have the potential to be transformational in oncology by directly causing tumor cell death and also by delivering a potent payload in a targeted fashion that increases innate and adaptive immune system stimulation. AstraZeneca has an exciting portfolio of molecules that we believe may augment oncolytic virus activity.”

The agreement is the second that AstraZeneca has recently struck in the oncology area. In late March, the drugmaker entered into a development and commercialization partnership worth up to $6.9 billion with Japan’s Daiichi Sankyo for trastuzumab deruxtecan, an antibody-drug conjugate and potential new cancer treatment.