Celgene will partner with Inception IBD to discover and develop new therapies for ulcerative colitis and Crohn’s disease, in an up-to-$40 million collaboration that gives Celgene the right to buy its partner.

The partnership is designed to enable Inception IBD to significantly expand its current drug discovery efforts by advancing its small molecule therapeutics from preclinical discovery to late preclinical development.

“Our enthusiasm for the Inception Sciences Montréal team, their technology, and their connections to academic leaders in inflammatory bowel disease is reflected in this important extension of our commitment to provide innovative therapies for these patients,” Rupert Vessey, FCRP, DPhil, svp, translational development at Celgene, said in a statement.

Celgene has agreed to pay Inception IBD up to $40 million cash payments during the course of the collaboration. At the end of the partnership, Celgene has the right to acquire Inception IBD.

Inception IBD seeks to develop first-in-class small molecule drugs for inflammatory bowel disease (IBD) based on genomic targets identified from tissue analysis of IBD patients and its own translational platform. The company says those capabilities allow it to focus on hallmarks of the disease including epithelial barrier dysfunction.

Inception IBD is among startups created by Inception Sciences, a drug discovery incubator and company with research sites in San Diego, Vancouver, and Montréal. Inception IBD is the first company to be incubated and launched from the Montreal site, established last year, with backing from Versant Ventures, Fonds de solidarité FTQ, and Inserm Transfert Initiative.

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