Amgen Inc. has became the latest drug maker to sign a licensing deal, potentially worth up to $500 million, for the right to commercialize a drug candidate first developed by Monrovia biotech Xencor.

The experimental antibody-based therapy, XmAb5871, is being studied to treat autoimmune diseases. The Thousand Oaks biotech giant late Thursday said that it will pay privately held Xencor an undisclosed amount of upfront and early development milestone payments. If successful, the drug would boost Amgen’s porfolio of autoimmune disease therapies, which is lead by its rheumatoid arthritis drug Enbrel. Antibody drugs work with body’s immune system to fight disease.

Once it completes a mid-stage human study, Amgen has the option to license the treatment world-wide and take over all future development. If that happens, payments to Xencor would total $75 million. The deal includes up to another $425 million in clinical, regulatory and commercialization milestone payments to Xencor, which also will receive tiered royalties from sales of the treatment if approved.

“Amgen’s long-time leadership in antibody development for oncology and inflammatory diseases aligns seamlessly with Xencor’s pipeline development,” Xencor Chief Executive Bassil Dahiyat said in a statement. “The option deal structure allows us to continue to lead the development of XmAb5871 while also leveraging Amgen’s experience in developing novel biologics for unmet medical needs.”

This is the second time that Xencor has decided to license one of its discoveries to a company with deeper pockets so that it can concentrate on other drug candidates. The company in June licensed an antibody-based cancer treatment to MorphoSys AG of Munich, Germany. It also has licensed access to its drug development platform to larger companies such as Merck & Co. Inc. and Pfizer Inc.