Alba Therapeutics said Friday it will collaborate with pharmaceutical giant Shire to develop and sell a drug for gastrointestinal disorders in a deal that could be worth more than $325 million.

Shire is buying the development rights outside of the United States and Japan for AT-1001 for an upfront cost of $25 million. Alba is retaining rights to commercialize the drug in Japan and the United States.

Joint development costs will be split evenly between Shire (NASDAQ:SHPGY), based in Basingstoke, England, and Alba of Baltimore after two phase II studies for Celiac disease are completed.

Alba will be eligible to receive more than $80 million if certain clinical, regulatory and product launch milestones are met for the treatment of gastrointestinal conditions.

If the two companies expand their collaboration beyond gastrointestinal conditions, additional milestone payments eclipsing $40 million per condition will accrue to Alba. And Alba will be eligible to receive up to $220 million in sales-based milestone payments and royalties. Shire has its U.S. headquarters in Wayne, Pa.

Published by Philadelphia Business Journal:
http://www.bizjournals.com/philadelphia/stories/2007/12/10/daily50.html