US drugmaker Theravance has signed a license deal granting Japan’s Astellas Pharma commercialisation rights to its injectable antibiotic telavancin, a lipoglycopeptide that targets serious infections including methicillin-resistant Staphylococcus aureus.

Under the terms of the deal, Theravance will receive an upfront payment of $65 million dollars from Astellas – the third largest drugmaker in Japan - and is eligible for up to $156 million in milestone fees, including $136 million for completion of the ongoing Phase III trials in complicated skin and skin structure infections and hospital-acquired pneumonia.

$20 million will be paid to Theravance if Phase III data demonstrate telavancin's superiority over vancomycin – currently considered a last-line defense against resistant pathogens - against MRSA. The San Francisco-headquartered firm will also receive royalties on global sales of the agent that range from 10%-20%.

In return, Theravance will be responsible for all costs to develop telavancin for these indications. Japan is excluded from the agreement and Theravance will continue to explore partnering options for this market.

In addition to telavancin, Astellas has also received an option on TD-1792, a drug that is designed to combine the antibacterial activities of a glycopeptide and a beta lactam in a single molecule, which is currently in preclinical development.