Evotec is acquiring fellow German firm DeveloGen in a deal that could be worth up to 14 million euros.

The agreement involves a mixture of Evotec shares and deferred cash payments based on milestones and royalties. It will see the Hamburg-headquartered firm take on DeveloGen’s alliances with Boehringer Ingelheim and Israel’s Andromeda Biotech.

The Boehringer pact involves the development of small molecules to treat type 2 diabetes and could be worth up to 237 million euros for the lead compound, plus royalties. The deal with Andromeda, which is part-owned by Teva Pharmaceutical Industries, relates to DiaPep277, a synthetic peptide immunomodulator for type 1 diabetes. Teva licensed the drug last year and it is currently in Phase III.

Werner Lanthaler, Evotec’s chief executive, said that through the acquisition of DeveloGen, “and its disease biology know-how in metabolic disorders”, his firm has broadened its “portfolio of high-value partnerships and added substantial potential for milestone payments over the next years”. He noted that that, “importantly, we are acquiring this value potential for our shareholders without assuming many of the risks associated with such transactions”, because of the initial purchase price “almost half will only be released following the achievement of defined company goals”.

Evotec concluded by saying that it expects to spend 2 million euros in cash requirements and transaction costs.