Baltimore Business Journal - by Robert J. Terry Staff

Alba Therapeutics said Friday it will collaborate with pharmaceutical giant Shire plc to develop and sell a drug for gastrointestinal disorders in a deal that could be worth more than $325 million.

Shire is buying the development rights outside of the U.S. and Japan for AT-1001 for an upfront cost of $25 million. Alba is retaining rights to commercialize the drug in Japan and the U.S.

Joint development costs will be split evenly between Shire (NASDAQ: SHPGY), based in the United Kingdom, and the Baltimore bioscience firm after two Phase II studies for Celiac disease are completed. Celiac disease is an intestinal disorder characterized by the inability to digest a protein found in wheat. Alba is also studying AT-1001's impact on other autoimmune conditions, including Type 1 diabetes.

Alba will be eligible to receive more than $80 million if certain clinical, regulatory and product launch milestones are met for the treatment of gastrointestinal conditions.

If the two companies expand their collaboration beyond gastrointestinal conditions, additional milestone payments eclipsing $40 million per condition will accrue to Alba. And, Alba will be eligible to receive up to $220 million in sales-based milestone payments and royalties.

"Alba's products have the potential to be an excellent addition to our current gastrointestinal business," Shire CEO Matthew Emmens said in a statement. "This technology should provide significant benefit to patients with serious autoimmune and inflammatory conditions."

Alba has emerged as one of Greater Baltimore's closely watched biotech companies since its launch in 2004. The company was formed to commercialize Dr. Alessio Fasano's discovery of zonulin, a protein that regulates the movement of fluids and molecules in and out of the intestine.

Fasano is a University of Maryland, Baltimore researcher. Alba, led by CEO Dr. Blake M. Paterson, has won more than $40 million in venture funding since its launch.

In a statement Friday, Paterson said the deal brings together Alba's autoimmune development capabilities with Shire's proven track record in gastrointestinal drug development and commercialization and "will greatly enhance our efforts to bring these novel therapies to patients."