An Oxford-based gene and cell therapy group has announced a major deal with Swiss pharmaceuticals company Novartis.
Oxford BioMedica today revealed it signed a deal potentially worth more than $100m (£77.1m) with Novartis for the supply of material for its new cell therapy, CTL019.
The agreement builds on an existing relationship between the two companies that collaborated on CTL019, which will launch commercially later this year.
The contract is for the supply of lentiviral vectors, which are used to generate CTL019, a treatment for an especially difficult type of leukaemia.
Novartis has flagged the treatment as a potential blockbuster.
The supply agreement is for the next three years, with the potential of an extension to five years, and it includes a $10m upfront payment for Oxford BioMedica.
John Dawson, the boss of Oxford BioMedica, said:
The new deal with Novartis will strengthen the group's balance sheet immediately and will support the group's continued growth over the next three years.
The company is also set to receive royalty payments on future sales of CTL019, which analysts at Jefferies said could earn Oxford BioMedica between £65-75m a year assuming peak sales of at least $1bn, according to Reuters.
Sheena Berry, analyst at N+1 Singer, said: "We had assumed Novartis would establish a new supply agreement with Oxford BioMedica but it is reassuring to have the agreement confirmed. We continue to look forward to regulatory approval of CTL019."
An advisory panel in the US will meet to discuss whether or not to approve CTL019 at a meeting on 12 July.