Japan-based Otsuka Pharmaceutical has signed a deal with Danish pharmaceutical company Lundbeck for the development of psychiatric and neuroscience drugs.

The deal covers five medications, including two of Otsuka’s late-stage drugs – a depot formulation of schizophrenia drug Abilify and OPC-34712, currently in Phase III trials for the treatment of schizophrenia and major depressive disorder.

As per the terms of the agreement, Otsuka will receive an upfront payment of $200m from Lundbeck, followed by up to $1.4bn in development and regulatory milestones.

Lundbeck will receive 50% and 20% of European and US sales respectively for the Abilify depot formulation, as well as 50% of sales in Europe and Canada and 45% of US sales of OPC-34712.