(Reuters) - Johnson & Johnson on Tuesday announced a licensing deal with Vedanta Biosciences to develop the privately held company's lead microbiome-based drug candidate for inflammatory bowel disorders, such as Crohn's disease and ulcerative colitis.
J&J said Vedanta will receive an undisclosed upfront payment and would be eligible to receive up to $241 million for achieving development and commercial milestones.
In preclinical studies, the drug, VE202, showed signs of efficacy in models of autoimmune disease, J&J said.
The human microbiome is an ecosystem of trillions of bacteria and microorganisms that live in the gut and elsewhere and are believed to play an important role in regulating metabolism, the immune system and other critical functions.
"The human microbiome is a strategic area of research and development and we have formed a number of exciting biotech and academic collaborations in this promising scientific space," Sue Dillon, head of immunology research and development for J&J's Janssen unit, said in a statement.
The Crohn's disease market is expected to increase to $4.5 billion by 2020 and the ulcerative colitis market to $4.2 billion by 2023 in the United States, Japan and the five largest European markets, according to forecasts by Decision Resources.
Inflammatory bowel diseases affect about 1.4 million people in the United States, according to the Crohn's and Colitis Foundation of America.
J&J already sells biotech drugs approved for ulcerative colitis and Crohn's with its Simponi and Remicade.
The company said it may elect to develop the Vedanta drug for additional uses with similar terms to the bowel disease deal.
Reporting by Bill Berkrot; Editing by Leslie Adler