Takeda Pharmaceutical will partner with Gencia to co-develop its new class of small molecule drugs as drug candidates for hematological and inflammatory diseases, in a collaboration that could generate more than $500 million for Gencia, the companies said today.

Gencia says its Mitochondrial Agonists of the Glucocorticoid Receptor (MAGR) compounds may offer the therapeutic potential of conventional steroids, but are chemically distinct and do not have the side-effects, lack of response, or induced resistance that have frequently limited use of glucocorticoid drugs.

“Our proprietary platform improves potency, selectivity, activity, and safety of therapeutics for areas as diverse as neurology, cardiovascular, oncology, inflammation, and other fields of medicine,” Gencia states on its website.

According to the companies, the initial aim of their collaboration will be joint research and development leading to two preclinical drug candidates—one each in inflammation and oncology. Takeda has agreed to explore opportunities to conduct clinical trials for drug candidates identified by the partnership.

Takeda has agreed to pay Gencia unspecified upfront payments and preclinical milestones for the two compounds, as well as aggregate clinical, commercialization, and sales milestones that could potentially reach approximately $500 million, plus royalties on sales of any successfully commercialized products arising from the partnership.

“This collaboration and license agreement with Takeda marks an important milestone in the growth and development of our company,” Gencia president and CEO Allen A. Cunningham said in a statement. “Takeda’s strength in drug discovery and development, and in particular their commitment to oncology and inflammation drug research, provides Gencia with the opportunity to advance our mitochondrial targeting platform and MAGR compounds into the clinic, and ultimately to patients in need of these therapies.”

Added Tetsuyuki Maruyama, Ph.D., general manager and head of the Pharmaceutical Research Division at Takeda: “We expect to change the paradigm for how patients are treated by potentially avoiding the issues that result from long-term steroid use.”