Shares of Five Prime Therapeutics (FPRX) are up 62% after entering into a collaboration agreement with Bristol-Myers (BMY). Both companies entered into this agreement to collaborate on Five Prime's anti-body program for the treatment of cancer. Five Prime is receiving an upfront payment of $350 million for this collaboration. 

The upfront payment for Five Prime is nice but it has the opportunity to receive up to a total of $1.74 billion on this collaboration pending positive clinical and regulatory milestones are met. The main clinical program for the collaboration will be a drug known as FPA008. 

The FPA008 drug is currently in phase 1 clinical testing and it is formulated as an immunotherapy drug. That means the drug is processed to stimulate the immune system to target and kill cancerous cells in the body. This global deal established will allow for the ability of double-digit royalty sales and an ability to co-promote the product in the United States.