Bayer has linked up with Orion to develop the Finnish drugmaker’s investigational prostate cancer drug.

The two companies plan to start jointly the Phase III programme on ODM-201, an oral androgen receptor inhibitor for patients with non-metastatic castration-resistant prostate cancer. These patients are at high risk of developing metastatic disease, Bayer notes, and can be identified with a rapid prostate-specific antigen test.

There will be joint development of ODM-201, with the German company “contributing a major share of the costs“. Bayer will commercialise the drug globally and Orion, which has the option to co-promote in Europe, will be responsible for manufacturing.

The Espoo-based company will receive an upfront fee of 50 million euros and is eligible to receive certain development, tech transfer and commercialisation milestones, as well as tiered double-digit royalties. As a result of the agreement, Orion has upgraded its full-year sales and earnings estimate (to be similar to 2013) and says it will use the majority of the up-front payment against the costs of the Phase III study.

Joerg Moeller, head of global development at Bayer Healthcare, said that ODM-201 “has the potential to complement our portfolio in prostate cancer”, which is headed by Xofigo (radium-223 dichloride). Bayer expects that Xofigo, developed by recently-acquired Algeta, will become a blockbuster.