Sutro Biopharma Inc. shares leaped 67% to $7.24 a share in U.S. after-hours trading after the South San Francisco biotech company said it is collaborating with Japan’s Astellas Pharma Inc. to develop new cancer-fighting antibody treatments.

Specifically, Sutro and Astellas said they are developing “immunostimulatory antibody-drug conjugates” as potential treatment options for cancer patients that don’t respond to existing immunotherapies.

Under a new licensing agreement, Sutro will receive an upfront payment of $90 million to develop iADCs, the companies said in a joint statement. Sutro may receive up to an additional $422.5 million in development, regulatory and commercial milestones for each product candidate, plus royalties.

Sutro Chief Executive William Newell, said:

Sutro’s unique conjugation technology enables dual conjugations that site-specifically incorporate a potent cytotoxin that can directly kill tumor cells together with an immunostimulatory component that has the potential to locally prime an immune response to the patient’s particular tumor cells.

Naoki Okamura, chief strategy officer at Astellas, said:

The strategic partnership with Sutro will help us expand our pipeline and widen the choice of cancer immunotherapies.

An iADC combines an antibody with a small molecule compound that induces immunogenic cell death in addition to an immune activating molecule, the companies said.

Sutro will engage in research and preclinical studies to identify candidate compounds and then Astellas will pursue clinical development on anti-cancer treatments.