Roche has agreed to out-license certain rights to its invesitgational atropic dermatitis drug lebrikizumab to Demira in a deal that could be worth more than $1.4 billion.

Dermira will obtain exclusive, worldwide rights to develop and commercialize lebrikizumab, a monoclonal antibody targeting interleukin 13 (IL-13), for atopic dermatitis and all other indications – except for interstitial lung diseases, such as idiopathic pulmonary fibrosis, the rights for which will remain with Roche.

Dermira will make an initial payment of $80 million to Roche and payments totaling $55 million in 2018. Dermira will also be obligated to make additional payments upon the achievement of certain milestones: $40 million on the initiation of Dermira’s first Phase 3 clinical study, up to $210 million for regulatory and first commercial sale milestones in certain territories and up to $1.025 billion based on the achievement of certain thresholds for net sales of lebrikizumab for indications other than interstitial lung disease.

“Atopic dermatitis is one of the most common skin diseases in the world, affecting millions of adults and children, and moderate to severe forms of this condition present a tremendous burden for patients,” said Tom Wiggans, chairman and chief executive officer of Dermira. “We believe atopic dermatitis is one of the greatest unmet needs in dermatology, and lebrikizumab, if successfully developed and approved, could represent a meaningful advancement in the treatment of this disease.”

Dermira plans to initiate a Phase 2b dose-ranging study assessing lebrikizumab in adult patients with moderate-to-severe atopic dermatitis in the first quarter of 2018.

The transaction is expected to close in the third quarter of 2017.