Astellas Pharma has bagged licensing rights to a late-stage kidney cancer treatment from Aveo Pharmaceuticals in a deal that could be worth some $1.4 billion to the US firm.

The Japanese drugmaker is paying an upfront cash fee of $125 million for worldwide rights outside of Asia to tivozanib, which is in Phase III for advanced renal cell carcinoma. That trial is comparing the drug, which inhibits all three VEGF receptors, with Bayer's Nexavar (sorafenib); the initial data is due in mid-2011.

Aveo could also receive up to an additional $1.3 billion, comprised of $575 million in clinical and regulatory milestones, including $90 million in connection with the regulatory filings and market approval of tivozanib in RCC, as well as more than $780 million in commercial payments. If approved,  the Cambridge, Massachusetts-based firm will lead commercialisation of tivozanib in North America and Astellas will cover the European Union, with all costs and profits being shared 50/50. 

In other territories, Astellas will develop the drug and pay Aveo a tiered, double-digit royalty. However in Asia, the rights will still be held by another Japanese company, Kyowa Hakko Kirin.

Astellas chief executive Masafumi Nogimori said "oncology is a high-priority therapeutic area" for  the firm and it is confident thre Phase III trial "is positioned for success". He added that "we also strongly believe tivozanib has significant potential in multiple cancers beyond RCC".