Bristol-Myers Squibb and Alder Biopharmaceuticals have announced a global agreement to develop and commercialise ALD518, a promising biologic for the treatment of rheumatoid arthritis.

Under the agreement, Alder will grant worldwide exclusive rights to develop and commercialise ALD518 to Bristol-Myers Squibb for all potential indications except cancer, for which Alder will retain rights.

Bristol-Myers Squibb will, however, be granted an option to co-develop and commercialise the novel biologic outside the US.

Bristol-Myers Squibb will make an upfront cash payment of $85m to Alder as well as potential development-based and regulatory-based milestone payments of up to $764m and potential sales-based milestones and royalties, which may exceed $200m.

Bristol-Myers Squibb MD and senior vice-president of global development and medical affairs said that as part of the company’s String of Pearls strategy, this transaction provides Bristol-Myers Squibb with the opportunity to strengthen its immunoscience pipeline.

ALD518 is a humanised monoclonal antibody designed to block a pro-inflammatory molecule called interleukin-6, which plays a key role in the inflammation, swelling, pain and destruction of large and small joints associated with rheumatoid arthritis.

The effectiveness of the collaboration agreement is subject to antitrust clearance by the United States Federal Trade Commission and Department of Justice.