Updated from 9:38 a.m. EDT

After more than two months of anxious anticipation, biotech firm


( GNTA) has finally inked a long-awaited partnership with French-German pharmaceutical firm


( AVE) for its experimental cancer drug, Genasense.

Under terms of the deal, announced Monday, Aventis will pay up to $480 million in cash, equity, milestones and convertible debt to Genta. In exchange, Aventis and Genta will co-market Genasense in the U.S., while Aventis will have exclusive rights to the drug in the rest of the world.

Genta is currently running three, phase III clinical trials of Genasense in patients suffering from malignant melanoma, or skin cancer, and two blood-related cancers --- chronic lymphocytic leukemia and multiple myeloma. Results from the trials, which all test Genasense in combination with existing chemotherapy drugs, are expected this summer.

A deal for Genasense has been expected since February, when rumors started flying that Aventis was the suitor. Genta was up $2.26, or 19%, to $13.99 in recent trading, although that's off an earlier high of $16.40.

The somewhat muted response is likely being caused by a number of factors. The biotech sector, overall, is in a serious

slump. Biotech investors have already been stung by overly optimistic Big Pharma-biotech deals that eventually went bad -- most notably the

Bristol-Myers Squibb

(BMY) - Get Report


ImClone Systems


debacle. Lastly, Aventis has a mixed record with its biotech partnerships. Most recently, its collaboration with



and its treatment for the common cold blew up in March.

"This a good deal for Genta, but not fantastic," says Stephens biotech analyst Jason Zhang, adding that the deal gives Genta modest upfront payments but is fairly back-loaded, probably because Aventis is being careful not to make the same mistake as Bristol-Myers. Zhang rates Genta a buy and his firm doesn't do banking for the company.

Other terms of the deal call for Aventis to fund 75% of all future new drug application-development costs of the drug in the U.S., and 100% of the development, marketing and sales costs in the U.S. and elsewhere -- a figure estimated by Genta to approach $400 million over the next three years. Genta will receive undisclosed royalties on all worldwide sales of Genasense, which Genta CEO Ray Warrell described as being in the double-digit range.

But the bulk of Genta's rewards in new partnerships are contingent upon the company proving that Genasense works. The biotech firm will receive a total of $135 million in initial and near-term payments consisting of $10 million in cash as a licensing fee and $40 million in cash as development fees, $10 million on convertible debt and $75 million pursuant in an equity development after Genta achieves an undisclosed clinical milestone with Genasense.

Another $280 million in cash and $65 million in convertible notes will be paid by Aventis to Genta after the drug passes successfully through other key, but undisclosed milestones.