(Reuters) – Gilead Sciences (NASDAQ: ) said on Saturday it was partnering with Denmark’s LEO Pharma to develop programs to treat patients with inflammatory diseases.

The Danish company will be eligible to receive up to $1.7 billion in compensation that includes an upfront payment of $250 million from Gilead.

In return, Gilead has global rights to develop, manufacture, and commercialize the small molecule oral STAT6 (signal transducer and activator of transcription 6) program.

Targeting STAT6 has shown potential preclinically to treat a broad population of patients with inflammatory conditions such as atopic dermatitis, asthma, and COPD, the statement said.

LEO Pharma may receive tiered royalties ranging from the high single-digits to the mid-teens on sales of topical STAT6 products.

The transaction is expected to reduce Gilead’s GAAP and non-GAAP 2025 earnings per share by approximately $0.15 – $0.17.

“Through the collaboration with LEO Pharma, we hope to explore the potential of the STAT6 pathway to bring an oral option for patients suffering from chronic inflammatory conditions,” said Flavius ​​​​Martin, executive vice president of research at Gilead Sciences.