Eli Lilly is buying Avid Radiopharmaceuticals in a deal that could be worth up to $800 million for the stockholders of the privately-held firm.

The drugs major is paying $300 million upfront for Avid, whose lead programme is florbetapir, a molecular imaging agent for detecting amyloid plaque, which is linked to Alzheimer's disease, in the brain. A marketing application for florbetapir was recently submitted to the US Food and Drug Administration and Lilly noted that Avid also comes with "a diagnostics development platform covering several disease areas", including Parkinson's and diabetes.

As well as the upfront fee, Avid stockholders will also be eligible for up to $500 million in additional payments, depending on the success of florbetapir. It will continue to operate from its facility in Philadelphia, and provide "uninterrupted support for ongoing academic clinical trials, including the Alzheimer's Disease Neuroimaging Initiative", as well as ongoing studies for other pharmaceutical companies.

Lilly chief executive John Lechleiter said the acquisition aligns well with the firm's "innovation-based strategy, offers a potential near-term revenue opportunity, leverages our neuroscience expertise and will immediately bolster our diagnostics capabilities".

Lilly is already an investor in Avid through its venture capital arm and Pfizer Strategic Investments Group is a backer. The company will be hoping that the addition of Avid will boost its efforts in the race to develop effective treatments for Alzheimer's although it pulled the plug on semagacestat for the disease, after the experimental drug disappointed in Phase III trials in August.