Abbott Laboratories and Belgium-based pharmaceutical company Galapagos have announced a collaboration focusing on the development of Galapagos’ GLPG0634, a mid-stage rheumatoid arthritis medication.

GLPG0634, a Janus kinase-1 inhibitor, is currently under development and has reported results from a four-week Phase IIa study in which the drug demonstrated efficacy measures amongst the best reported in rheumatoid arthritis.

Abbott has paid an initial $150m for the drug, with Galapagos due to receive a further payment of $200m upon the completion of further Phase II studies into the drug. Galapagos will retain the rights to co-promote the drug in Belgium, Netherlands and Luxembourg.

As per the terms of the agreement, Galapagos will also be eligible to receive milestone payments that could reach $1bn and tiered double-digit royalties, leaving the total value of the agreement to be potentially worth in excess of £1.3bn.

Abbott global research and development senior vice president John Leonard said, "The addition of this novel, oral compound offers patients the potential for advanced treatment options for an improved patient experience to address RA and other autoimmune disease."

An additional Phase IIa dose-range finding study of the drug is expected to commence shortly.