The Danish biotech Genmab has scored one of the biggest licensing deals so far this year with its anti-cancer investigational compound daratumumab. Genmab and Janssen Biotech, a division of Johnson & Johnson, have entered into a global license and development agreement for the human monoclonal antibody.

Under the terms of their agreement, Genmab will grant Janssen exclusive worldwide rights to develop and commercialize daratumumab as well as a backup CD38 human antibody. Daratumumab targets CD38, which is currently in development for multiple myeloma and may have potential in other blood cancers. CD38 is a protein expressed on the surface of immune cells. Its expression on diseased cells is an indicator of the severity of hematological cancers.

Genmab will receive $55 million in an upfront license fee and Johnson & Johnson Development, J&J’s corporate investing arm, will invest approximately $80 million for 5.4 million new shares of Genmab.

Genmab will also be eligible for up to $1 billion in development, regulatory, and sales milestones, plus tiered double digit royalties. Janssen will take over all development and commercialization costs going forward, including the costs of two ongoing early/mid-stage studies. Janssen is planning to initiate more than 10 new studies, including in three new indications.

The deal will make J&J the biotech’s biggest shareholder, replacing GlaxoSmithKline, which had acquired its stake under a 2006 deal for the chronic lymphocytic leukemia drug Arzerra. GSK’s stake will be reduced to 8.9 percent.

Shares shot up 17 percent on the news, boosting investors’ confidence in the Danish biotech, which has struggled over the past few years from disappointing sales of Arzerra, its only marketed drug, and the termination of the development of another cancer antibody in late 2010 that resulted in slashing two thirds of its workforce.

The down-sized company needed to partner with a big drugmaker to help continue development of daratumumab. Fortunately the compound elicited a lot of interest. Genmab CEO Jan van de Winkel told EP Vantage that it received 15 formal term sheets.

Now to keep investors’ enthusiasm, the biotech will need some good clinical news, which could come as early as the American Society of Hematology meeting in December.