Updated from 8:55 a.m. EDT

France's

Flamel Technologies

was bid up sharply in premarket trading after

Bristol-Myers

(BMY) - Get Report

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anointed a diabetes treatment it's developing.

The companies entered a licensing and commercialization agreement covering Flamel's Basulin, a controlled-release form of insulin that is about to enter phase II clinical trials. The agreement calls for Bristol-Myers to assume the cost of future development and manufacturing of the drug, in return for exclusive worldwide rights to it.

Bristol-Myers will pay Flamel $20 million now and $145 million when certain milestones are reached. It will also pay "double-digit royalties" to Flamel when and if the treatment hits the market.

Flamel closed Wednesday at $26.95 on the

Nasdaq

.

The pact needs antitrust approval.