Italian pharmaceutical company Alfasigma S.p.A. announced on Wednesday that it has formed a strategic partnership with German biotechnology company Innovative Molecules GmbH.

Under the agreement, Alfasigma will invest in Innovative Molecules and has obtained the exclusive worldwide licence to the parenteral formulation of adibelivir (formerly IM 250) for the treatment of Herpes Simplex Virus (HSV) encephalitis, an ultra-rare and life threatening condition.

Alfasigma receives exclusive global rights to develop, manufacture, and commercialise the parenteral formulation of adibelivir for HSV encephalitis, while Innovative Molecules retains full rights to all other formulations, including the oral formulation.

Financial terms cover payments of up to EUR125m in upfront and milestone payments, triggered by development progress, regulatory approvals, and global commercial milestones.

Adibelivir is a next generation helicase-primase inhibitor. The oral formulation is advancing toward Phase 2 development for genital herpes, while the parenteral formulation is dedicated exclusively to HSV encephalitis and has received approval to enter Phase 1 clinical development.