Biotech Pharmaxis has sold an anti-inflammatory drug it was developing to Germany's Boehringer Ingelheim in a deal worth up to $750 million.
The news pushed Pharmaxis shares to a two year high, gaining 8.5 cents, or 51.5 per cent, to 25 cents.
The drug, referred to as PXS4728A, is being developed for the treatment of the liver-related condition non-alcoholic steatohepatitis (NASH).
NASH is the progressive form of non-alcoholic fatty liver disease, which is the most common liver disorder in western industrialised nations.
NASH is regarded as a major cause of cirrhosis of the liver.
The high prevalence of type 2 diabetes and obesity, which can lead to NASH and other non-alcoholic fatty liver diseases, is expected to make NASH potentially the most common cause of advanced liver conditions in coming decades.
Pharmaxis will receive an upfront payment of 27.5 million euros in the deal with Boehringer.
It also will receive up to 55 million euros in milestone payments tied to phase II and phase III clinical trials, and up to 140 million euros in milestone payments related to marketing, regulatory and pricing approvals.
Pharmaxis can also qualify for other milestone payments.
Global pharmaceutical firm Boehringer will be responsible for all development, regulatory, manufacturing and commercialisation activities.
"This is a transformational event for Pharmaxis," Pharmaxis chief executive Gary Phillips said on Monday.
"With a total potential value in excess of $A750 million, it is a globally competitive deal and significant for the Australian biotech sector."
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