UPDATE 1-Glaxo signs potential $1 bln drug deal with Chroma

* Compounds target inflammatory disorders such as arthritis

* Unlisted UK biotech has potential to get more than $1 bln

* Chroma gets upfront cash and equity investment

(Adds detail, background)

LONDON, June 23 (Reuters) - GlaxoSmithKline GSK.L has signed a deal with Chroma Therapeutics, giving it access to the unlisted British biotech company's experimental compounds for inflammatory diseases such as rheumatoid arthritis.

The move boosts Glaxo’s early-stage pipeline but will not deliver products to the market for many years as Chroma’s inflammation programmes have yet to enter clinical development, according to the company’s website.

The two groups said on Tuesday that Chroma had the potential to receive in excess of $1 billion in total milestone and option payments from Glaxo if all four small-molecule programmes covered by the agreement were successful.

Oxford-based Chroma will receive a significant upfront cash payment and Glaxo will also invest in its 15 million pounds ($25 million) Series D equity financing.

Chroma’s potential drugs target macrophages -- a type of large white blood cell that plays a key role in the immune system -- using a proprietary esterase-sensitive motif (ESM) technology that enhances delivery.

The company’s venture capital backers include Abingworth Management, Essex Woodlands Healthcare Ventures, Gilde Healthcare, Nomura Phase4 Ventures and the Wellcome Trust. (Reporting by Ben Hirschler; Editing by Dan Lalor) ($1 = 0.6070 pound)