Swedish biopharmaceutical company BioArctic AB (STO:BIOA-B) announced on Tuesday that the company has entered into an option, collaboration and licence agreement with Swiss pharmaceutical company Novartis Pharma AG (SIX:NOVN) (NYSE:NVS) regarding a potential new treatment combining BioArctic's proprietary BrainTransporter technology with an undisclosed target in neurodegeneration.

As part of the initial research collaboration, BioArctic will receive USD30m in upfront payment.

Novartis will evaluate the data generated during the initial collaboration and decide whether to exercise its option to license any drug candidate generated. If Novartis exercises its option, BioArctic will be eligible to receive additional payments of up to USD772m. BioArctic will also be entitled to tiered mid-single digit royalties on future global product sales if the product reaches the market.

Under the research collaboration, BioArctic will generate a new drug candidate combining the BrainTransporter technology with a Novartis proprietary antibody. Should Novartis decide to exercise its option following the evaluation of the generated drug candidate, Novartis will assume full responsibility for the global development and commercialisation of the drug candidate and related products.

This agreement is the third collaboration BioArctic has entered with partners using the BrainTransporter technology. BioArctic retains all rights for use of the BrainTransporter platform outside of the scope of these three agreements.