The UK’s Astex Therapeutics has signed an oncology pact with a unit of healthcare giant Johnson & Johnson that could net the privately-held firm over $500 million.

The new agreement gives J&J subsidiary Janssen Pharmaceutica a worldwide exclusive licence to compounds arising from Astex’s fibroblast growth factor receptor inhibitor programme. The firms are also setting up a drug discovery alliance to identification of novel inhibitors against a further two cancer drug targets.

Ortho Biotech, the R&D arm of Janssen Pharmaceutica, will be responsible for completing all pre-clinical and clinical development of treatments arising from the collaboration and Astex also has an option to co-commercialise FGFR products in the USA. Cashwise, Janssen is making an upfront payment and equity investment in Astex, plus “committed research funding”, totalling $37.4 million over a two-year period, and tiered, double-digit royalties.

The FGFR inhibitors that will be developed come from Astex’ fragment-based drug discovery platform, called Pyramid, and since 2004 it has been used to generate one new cancer drug candidate for clinical development each year. Harren Jhoti, chief executive at the Cambridge-based firm, said the deal is “another testament to Astex’s position as the leader in fragment-based drug discovery and the productivity generated by our platform.”

Astex already has alliances in place with the likes of Novartis, AstraZeneca, Bayer and Boehringer Ingelheim.