Belgium-based biopharmaceutical firm Ablynx has signed a licensing agreement worth over $840m with US drug maker AbbVie (ABBV) for the development and commercialisation of Ablynx’s autoimmune disease candidate, ALX-0061.

Under the deal, Ablynx will receive an upfront payment of $175m and be eligible for around $665m, as well as double digit tiered royalties on net sales upon commercialisation.

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The Phase II development for rheumatoid arthritis (RA) and systemic lupus erythematosus (SLE) will be carried out by Ablynx, which will use part of the $175m to fund the next phases of clinical development of ALX-0061.

Ablynx chairman and CEO Edwin Moses said the deal represented a major milestone.

"It also demonstrates that we are delivering on our business model of strategic partnering for the development and commercialisation of selected programmes within our pipeline," Moses said.

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"The combined clinical expertise of AbbVie and Ablynx will allow us to progress with the rapid development of ALX-0061, with the current plan being the initiation of various clinical trials in both RA and SLE during the course of 2014 and 2015."

"The combined clinical expertise of AbbVie and Ablynx will allow us to progress with the rapid development of ALX-0061, with the current plan being the initiation of various clinical trials in both RA and SLE during the course of 2014 and 2015."

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The deal will see AbbVie exercise its right to in-license ALX-0061 depending on the achievement of certain pre-defined success criteria.

Once AbbVie in-licenses ALX-0061, it will be responsible for Phase III development and commercialisation, as well as retain an option for co-promotion rights in Belgium, the Netherlands and Luxembourg.

Ablynx’s ALX-0061 is an anti-IL-6R nanobody being evaluated for the treatment of inflammatory diseases.

Results from a Phase IIa study completed in February showed strong efficacy and safety in patients with moderately to severely active RA on a stable background of methotrexate.

AbbVie pharmaceutical development vice-president Scott Brun said: "Anti-IL-6 antibodies are a proven mechanism of action for autoimmune diseases and ALX-0061 has shown potential in a Phase IIa clinical trial in RA."

Ablynx’s ALX-0061 targets the interleukin 6 pathway through its IL-6 receptor (IL-6R), which plays a major role in the inflammation process in RA and its small size (26kD) is expected to enable it to penetrate more effectively into tissues.

Rheumatoid arthritis is characterised by chronic and progressive joint inflammation that results in permanent, debilitating tissue damage, which is further compounded by joint deformation.