Maxygen, Inc. (NASD: MAXY), a biopharmaceutical company focused on developing improved versions of protein drugs, recently announced a global agreement with Astellas Pharma Inc., a pharmaceutical company dedicated to improving the health of people around the world through the provision of innovative and reliable pharmaceutical products. The agreement, in which Astellas will receive worldwide rights to commercialize MAXY-4 lead candidates for all autoimmune diseases and transplant rejection, represents a significant step.

MAXY-4 is Maxygen’s preclinical program to create a next-generation CTLA4-Ig protein for rheumatoid arthritis, transplant rejection and other autoimmune indications. The companies will co-develop MAXY-4 candidates for rheumatoid arthritis and other autoimmune diseases, under the terms of the development agreement, and Astellas will exclusively develop MAXY-4 candidates for transplant rejection. Additionally, Astellas will manufacture the finished product using the active drug substance provided by Maxygen, and market and sell such product globally.

Maxygen will receive a $10-million initial payment from Astellas Pharma, as consideration, and is eligible to receive up to an additional $160 million in pre-launch milestone payments. Per the agreement, Maxygen is also eligible to receive tiered double-digit royalties on all sales. If the option to co-promote is exercised, revenues from any such therapeutic product will be subject to a profit-sharing arrangement between the parties instead of royalty payment.

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