US biotechnology major Genentech has signed a broad-ranging agreement with CGI Pharmaceuticals to develop new drugs to treat cancer and autoimmune diseases.

The multiyear agreement, valued at up to $500 million in license and milestone payments including $25 million upfront.

Under the terms of the deal, Genentech obtains an exclusive license to discover, develop and market small molecules based on an undisclosed target throughout the world, except in the states of the European Union, where CGI retains rights.

Although the specific drug target involved in the transaction has not been disclosed, CGI is a specialist in kinase drug discovery, with programmes looking at multiplex inhibitors – targeting receptor tyrosine kinases involved in angiogenesis – as well as drugs that modulate Btk, a kinase target implicated in multiple immunological disorders and oncology.