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Bristol Myers, PDL Team on Cancer Drug

The two drugmakers signed a development and commercialization agreement for an early stage prospective treatment for multiple myeloma.

Bristol-Myers Squibb

(BMY) - Get Bristol-Myers Squibb Company Report

said Tuesday that it signed a development and commercialization agreement for

PDL BioPharma's

(PDLI) - Get PDL BioPharma, Inc. Report

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elotuzumab, an early stage prospective treatment for multiple myeloma.

Per the agreement, Bristol will pay PDL $30 million upfront for the rights to develop and market elotuzumab and for the option to expand the agreement to include PDL's PDL241 upon completion of preclinical studies.

PDL could receive additional milestone payments of up to $680 million for development and regulatory milestones and for sales milestones in multiple myeloma and other cancer indications. If Bristol chooses to expand the collaboration to include PDL241, it would receive an additional cash payment of $15 million, and up to $430 million in milestones.

Bristol is picking up 80% of all development costs related to the agreement.

PDL shares were rising 1.7% to $12 in recent after-hours trading.