Eli Lilly and Company and Nektar Therapeutics, a biopharmaceutical company, have announced a strategic collaboration to co-develop NKTR-358, an immunological therapy discovered by Nektar.

Under the agreement, Nektar will receive an initial payment of $150 million and is eligible for up to $250 million in additional development and regulatory milestones. Eli Lilly and Nektar will co-develop NKTR-358 with Nektar responsible for completing Phase I clinical development. The parties will share Phase II development costs: 75% Lilly and 25% Nektar. Nektar will have the option to participate in Phase III development on an indication-by-indication basis. Nektar has the opportunity to receive double-digit royalties that increase commensurate with its Phase III investment and product sales. Lilly will be responsible for all costs of global commercialization. Nektar will have an option to co-promote in the US under certain conditions.

NKTR-358 is a therapeutic that may address an underlying immune system imbalance in patients with many autoimmune conditions. It targets the interleukin (IL-2) receptor complex in the body to stimulate proliferation of inhibitory immune cells known as regulatory T cells, according to Eli Lilly. By activating these cells, NKTR-358 may act to bring the immune system back into balance.

This transaction is subject to clearance under the Hart-Scott-Rodino Antitrust Improvements Act and other customary closing conditions.

Source: Eli Lilly and Company