Agreement, which also covers the option to license a second compound, has a total value of $1.15 billion.

Bristol-Myers Squibb inked a deal potentially worth about $1.15 billion that gives it access to PDL BioPharma’s multiple myeloma drug in Phase I development. The agreement also allows Bristol-Myers Squibb to add another PDL BioPharma candidate still in the preclinical stage to its pipeline.

Bristol-Myers Squibb will make an upfront cash payment of $30 million for the development and marketing rights to elotuzumab in multiple myeloma and other indications. This initial fee also gives Bristol-Myers Squibb the option to license PDL241 after certain preclinical studies are complete.

In relation to elotuzumab, PDL BioPharma stands to earn up to $480 million based on development and regulatory goals being met and up to $200 million depending on sales-related milestones. The companies will share profits on sales of elozutumab in the U.S. PDL BioPharma will receive royalties on net sales of the drug outside the U.S.

If Bristol-Myers Squibb exercises its option to expand the collaboration to include PDL241, the company will tender an additional cash payment of $15 million. PDL will  then be eligible to receive up to $230 million in development and regulatory milestones and up to $200 million in sales-based milestones.

The companies together will focus on elotuzumab. Bristol-Myers Squibb will pick up 80% of development costs, and PDL BioPharma will provide the rest. PDL BioPharma will complete the ongoing Phase I program and provide support for Phase II studies. The same division of development costs and profit sharing that apply to elotuzumab would apply to PDL241.

Elotuzumab is an antibody that binds to the CS1 cell-surface glycoprotein, allowing the immune system to selectively kill myeloma cells with minimal effects on other cell types, according to the companies. PDL241 is also an anti-CS1 antibody. CS1 is reportedly expressed on multiple myeloma cells but is minimally expressed on normal cells.

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