Biogen Idec Inc. (NASDAQ:BIIB), which discovers and develops innovative therapies, entered into an exclusive license agreement with Knopp Neurosciences under which Biogen will develop and commercialize a drug for the treatment of Lou Gehrig’s disease, the companies said Wednesday.

The compound, KNS-760704, which is the pure form of dexpramipexole, is a novel oral neuroprotective therapy that showed in a Phase 2 study favorable dose-related effects in preserving motor function and extending survival of patients with amyotrophic lateral sclerosis (ALS), the official name of the disease.

Lou Gehrig’s disease is a motor neuron disorder categorized by progressive muscle weakness and wasting, affecting only 20,000 people in the U.S., and two per 100,000 worldwide. There has only been one drug approved so far for ALS treatment.

Knopp CEO Michael Bozik, M.D. said he is “pleased” to enter the agreement with Biogen, due to its leadership in the neurology industry and “proven track record” of delivering “innovative medicines” for diseases with “high unmet needs.”

Under the terms of the agreement, Biogen will lead the development of the drug for ALS and its potential commercialization in global markets, while Knopp provides development support and conducts certain U.S. commercialization activities under the direction of Biogen.

The deal calls for Biogen to purchase $60 million of Knopp stock and provide an upfront payment of $20 million and additional payments of up to $265 million, based on the achievement of the drug’s development, regulatory and sales milestones, as well as royalties based on global sales.