Shire plans to spend about $225 million on collaboration over potential Hunter syndrome drug

The drugmaker Shire plans to spend about $225 million in a joint effort with a privately held, U.S. firm to develop a potential treatment for the rare and life-threatening genetic disorder Hunter syndrome.

The British company said Wednesday it will pay $15 million upfront and then make additional payments to the firm, ArmaGen, to cover sales and development milestones and help fund research.

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ArmaGen will be responsible for conducting early- and mid-stage research, expected to start before the end of this year, on its potential treatment. Shire then will take over further clinical testing, including late-stage studies, which are the final and most expensive trials a drug passes through before the pharmaceutical company submits it to regulators for approval.

The potential treatment, labeled AGT-182, has received an orphan drug designation from both U.S. and European regulators. That status can lead to some added marketing exclusivity if the drug is approved and a faster review by regulators.

Shire PLC also is in talks with U.S. drugmaker AbbVie over a roughly $55 billion combination that would create a new company incorporated in the United Kingdom but controlled by shareholders of North Chicago, Illinois-based AbbVie Inc.

U.S.-traded shares of Shire climbed $1.24 to $255.20 in premarket trading Wednesday.