Adherex Technologies, a US biopharmaceutical company that develops compounds to fight cancer, witnessed a 33% boost to its share price on Friday after revealing that it had signed a deal with GlaxoSmithKline, which gives it the rights to the UK giant’s oncology product, eniluracil.

Under the terms of the agreement, GSK retains the right to buy eniluracil back at various times during its development, which would trigger milestone payments to Adherex of up to $120 million as well as double-digit royalties, depending on when, and if, an option is exercised. If GSK does not buy the product back, Adherex would be free to develop eniluracil alone or with other partners and would pay GSK development and sales milestone payments and double-digit royalties.

The deal also gives GSK an option to license Adherex’ lead biotechnology compound Exherin (also known as ADH-1), which is being developed as a treatment for cancer. If GSK exercises this option, Adherex would receive upfront, development and sales milestone payments of up to $100 million, plus double-digit royalties. In addition, the UK drug giant has invested $3 million dollars in a private placement that Adherex recently launched.

“Either of these licensing deals would be of major importance for Adherex alone, but the combination is a transforming event for the company,” said William Peters, Adherex’ chairman and chief executive. “The in-licensing of eniluracil provides Adherex with potential ‘blockbusters’ on both sides of our business: ADH-1 from our cadherin-based biotechnology platform and eniluracil from our specialty pharmaceuticals portfolio.”