Bristol-Myers Squibb and Allergan will jointly attempt to develop a drug to treat chronic pain from tissue damage, the drugmakers said Wednesday.
The agreement could eventually be worth $413 million, plus royalty payments.
Bristol-Myers will pay Allergan $40 million up front for the rights to the drug, which is currently referred to as AGN-209323.
Allergan could get another $373 million if the product advances through clinical development and regulatory review. Should the drug be approved, Allergan would receive royalty payments from sales.
The drug is said to be ready for mid-stage human trials as a treatment for neuropathic pain, or chronic pain usually accompanied by tissue injury. It is common in people with arthritis, cancer, and nerve damage. The drug can be given orally.
Allergan Inc., which is based in Irvine, Calif., is keeping the rights to develop AGN-209323 in eye drop form.
On Tuesday, Bristol-Myers Squibb Co. announced CEO James M. Cornelius would retire in May. He will be succeeded by Lamberto Andreotti, 59, Bristol-Myers' chief operating officer.
Shares of Bristol-Myers, based in New York City, fell 7 cents to $24.65 Wednesday. Shares of Allergan rose 23 cents to $60.36