Eli Lilly has entered into a collaboration with Japan's PeptiDream to discover and develop novel therapeutic peptides.

The Tokyo-based biopharmaceutical company says it will identify macrocyclic peptides as potential drug candidates for disease targets being pursued by Lilly. The US drug major will be responsible for any subsequent development.

PeptiDream will receive an undisclosed upfront payment, research funding and other payments upon the successful achievement of certain development milestones. It is also eligible to receive royalties.

Chief executive Kiichi Kubota said the Lilly link-up "underscores the value of PeptiDream’s novel screening technology for therapeutic peptide discovery as a way to help advance patient care".