Otsuka Holdings Co. has agreed to pay H. Lundbeck A/S as much as $825 million (about ¥78 billion) to develop an experimental Alzheimer's treatment.
Lundbeck shares rose the most in more than four years in Copenhagen trading.
Otsuka will pay its Danish partner $150 million when the deal is signed, and as much as $675 million if Lundbeck meets regulatory and sales goals, the companies said in a statement Tuesday.
Tokyo-based Otsuka will get rights to the medicine, known as Lu AE58054, in the U.S., Canada, East Asia including Japan, major European countries and the Nordic region.
The agreement adds to a partnership between Otsuka and Lundbeck that began in November 2011 to develop and commercialize as many as five psychiatric drugs. The earlier deal could be worth as much as $1.8 billion to Otsuka.
The companies won approval this month in the U.S. for a new formulation of the mood-stabilizing drug Abilify to treat schizophrenia.
"The global collaboration between Otsuka and Lundbeck continues to grow stronger with the addition of Lu AE58054," Otsuka President Taro Iwamoto said in the statement.
A late-stage trial of the drug will start this year and involve more than 2,500 patients, the companies said. Statistically significant improvement in cognition was observed in a midstage study, in which 278 patients with Alzheimer's disease took Lu AE58054 in combination with donepezil, a generic version of Eisai Co.'s Aricept, for 24 weeks.