On Wednesday, AbbVie Inc (NYSE:ABBV) and Xilio Therapeutics, Inc. (NASDAQ:XLO) announced a collaboration and option-to-license agreement to develop novel tumor-activated, antibody-based immunotherapies, including masked T-cell engagers, leveraging Xilio’s proprietary technology.

Xilio has developed a proprietary, clinically validated platform technology for tumor-activated biologics.

The company is advancing a pipeline of clinical and preclinical immunotherapies, including masked multispecific molecules, designed to achieve tumor-selective activation by leveraging masking and other unique components that are optimized for the specific target.

The action allows focused activity within the tumor microenvironment to minimize systemic adverse events.

Under the terms of the agreement, Xilio will receive $52.0 million in upfront payments, including a $10 million equity investment, and will be eligible to receive up to approximately $2.1 billion in contingent payments for option-related fees and milestones plus tiered royalties.

Concurrently, Xilio Therapeutics announced three wholly-owned preclinical programs for masked T cell engagers targeting prostate-specific membrane antigen for prostate cancer (PSMA), claudin 18.2 (CLDN18.2) and six-transmembrane epithelial antigen of prostate 1 (STEAP1).

• Xilio anticipates nominating a development candidate for its PSMA program in the ATACR format in the third quarter of 2025 and submitting an investigational new drug application (IND) in the first quarter of 2027.
• CLDN18.2 has broad potential as a T cell engager target for gastric, pancreatic, esophageal, and lung cancers. Xilio anticipates nominating a development candidate for its CLDN18.2 program in the ATACR format in the fourth quarter of 2025 and submitting an IND in the second quarter of 2027.
• STEAP1 has broad potential as a T cell engager target for prostate, colorectal, and lung cancers. Xilio anticipates nominating a development candidate for its STEAP1 program in the SEECR format in the first half of 2026 and submitting an IND in the second half of 2027.

Xilio anticipates that its existing cash and cash equivalents and the upfront payments under the agreement with AbbVie will be sufficient to fund its operating expenses and capital expenditure requirements into the first quarter of 2026.

Price Action: XLO stock is up 116.10% at $1.42 at the last check on Wednesday.

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This article Why Is Nano-Cap Cancer-Focused Xilio Therapeutics Stock Trading Over 100% On Wednesday? originally appeared on Benzinga.com

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