Genentech, CGI Sign Pact

The companies will to try to develop treatments for cancer and autoimmune disorders.
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Genentech

(DNA)

and CGI Pharmaceuticals signed an exclusive agreement to try to develop potential treatments for cancer and autoimmune disorders.

The pact is a multiyear deal. Genentech will make an upfront payment to CGI of $25 million, comprised of both license fees and an equity investment. All told, CGI could receive milestone and option payments in excess of $500 million if certain development and regulatory goals are met.

"CGI has committed itself to developing a highly novel approach in a very important area of biology," said Michael Varney, Genentech's vice president of small molecule drug discovery. "This collaboration supports Genentech's goal of aggressively pursuing novel and innovative therapies, small or large molecules, to important oncology or autoimmune diseases."

CGI is a privately held development-stage pharmaceutical company. Shares of Genentech slipped $1.46, or 1.7%, to $82.40.