In a press release Monday, pharmaceutical giant Roche (NASDAQOTH:RHHBY) announced that it has agreed with private biotech company Chiasma to develop and commercialize the latter's acromegaly and neuroendocrine tumor therapy Octreolin.
Acromegaly is a rare, progressive growth hormone disorder that picked up orphan-drug designation from the FDA. Chiasma is planning on filing for similar status in Europe. Chiasma officials said last year that the global market for the disease could be worth around $500 million, and Octreolin could reach out to the $600 million neuroendocrine tumor market if approved for that indication as well.
Roche will pay $65 million initially to Chiasma, according to the release, with milestone payments of up to $530 million with double-digit tiered royalties on net sales of the drug. Roche will in turn pick up the worldwide exclusive license to Octreolin, while company subsidiary Genentech will handle U.S. marketing if the drug is approved by the FDA.
Fool contributor Dan Carroll has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.