Agenus, Inc (NASDAQ: AGEN) announced a global alliance with Incyte Corp. (NASDAQ: INCY) to develop cancer therapies. The two pharmaceutical companies expect their new immuno-therapies to begin clinical trial in 2016.

The partnership will give Incyte access to Agenus’ Retrocyte Display™; a cell display platform. The two companies will primarily work to develop “checkpoint modulator antibodies directed against GITR, OX40, LAG-3 and TIM-3,” according to the press release. The costs and profits derived from two of the therapies will be split equally between the two companies, while the other two therapies will have royalty-bearing programs.

Agenus will provide “therapeutic antibody expertise” to the mutually beneficial partnership while Incyte will bring their “track record of success in oncology development and commercialization,” according to Agenus CEO Garo H. Armen, Ph.D.

Agenus shares spiked after the announcement on Friday and hit a 52-week high of $5.80 on Friday morning, January 9th. Agenus shares had a similar response last month when the pharmaceutical company announced promising results on a drug being developed in partnership with GlaxoSmithKline (NYSE: GSK). At that time, Agenus shares spiked more than 17%.

Analysts released bullish ratings on Agenus in regards to the new alliance. On January 9th, analyst Jason Kolbert of Maxim Group reiterated a Buy rating on AGEN and raised his price target from $10 to $11. Kolbert noted, “The technology value of the Agenus vaccine adjuvent platform can be a revenue driver but the partnership with Incyte for Agenus checkpoint inhibitors shows Agenus’ commitment to developing its cancer immunotherapy platform.” He explained his price target and forecast, commenting, “We have modeled the initial payment and equity investment by Incyte. The potential of the deal to generate milestones and royalties have not been modeled in, and thus represent additional upside. Combined with rolling our model forward to 2015 and applying a 30% discount rate in our FCF, discounted-EPS, and sum-of-the-parts models we have increased our price target to $11.00, from $10.00.”

Jason Kolbert has rated AGEN 9 times since October of 2013, earning a 78% success rate recommending the stock and a +48% average return per AGEN recommendation. Kolbert has a 47% overall success rate recommending stocks from the past year with a +8.9% average return per recommendation.

Separately on January 9th, analyst George Zavoico of MLV & Co. reiterated a Buy rating on AGEN and raised his price target from $6 to $9. The analyst believes the partnership will enable Agenus “to more rapidly and efficiently develop several CPMs, including some not yet disclosed, as well as its cancer vaccine product candidates while reducing its cash burn and bolstering its financial position.” Zavoico continues to voice his optimism about the partnership, noting “Incyte’s proven experience in developing and commercializing small molecule anti-cancer agents will be leveraged to accelerate and optimize development of Agenus’ CPMs… The agreement enables Agenus, together with Incyte, to explore product development opportunities that neither one would have been able to do by themselves.”

George Zavoica has rated AGEN 3 times since April, earning a 67% overall success rate rating the stock with a +33% average return per AGEN recommendation. Zavoico has a 63% overall success rating recommending stocks from the past year with a +15.7% average return per recommendation.

Also on January 9th, analyst Reni Benjamin of H.C. Wainwright reiterated a Buy rating on AGEN with a $6 price target.Benjamin noted, “Given the resources at Incyte, we believe the new agreement should accelerate the clinical development of new checkpoint antibodies, as well as provide considerable financial flexibility,” which will enable Agenus to pursue opportunities within unpartnered programs. The analyst concluded, “With approximately $106.4 MM in cash (pro forma), the potential to secure new partnerships, and a highly versatile platform, we believe Agenus remains an undervalued player in the immuno-oncology space.”

Reni Benjamin has rated Agenus 6 times since February of 2014, earning an 83% success rate recommending the stock and a +37.6% average return per AGEN recommendation. Benjamin has a 35% overall success rate recommending stocks from the past year with a +2.9% average return per recommendation.

On average, the top analyst consensus for AGEN on TipRanks is Strong Buy.