Sanofi is linking with Denali Therapeutics on the development of multiple molecules with the potential to treat a range of neurological and systemic inflammatory diseases.

The two lead molecules in the collaboration - DNL747 and DNL758 - target a signaling protein known as the receptor-interacting serine/threonine-protein kinase 1 (RIPK1) in the TNF receptor pathway, which regulates inflammation and cell death in tissues throughout the body.

The companies said they plan to study DNL747 in multiple sclerosis (MS), Alzheimer's disease, and amyotrophic lateral sclerosis (ALS), and DNL758 in systemic inflammatory diseases such as rheumatoid arthritis and psoriasis.

As per the terms of the deal, Sanofi will pay Denali $125 million in cash upfront, but future development and commercial milestone payments to the latter could overshoot $1 billion.

Sanofi and Denali will share commercial profits and losses from DNL747 in the US and China equally, while Denali will receive a royalty from Sanofi for other territories for DNL747 and worldwide for DNL758.

"RIPK1 is a promising target with the potential to bring disease modifying medicines to patients suffering from neurodegenerative diseases as well as systemic inflammatory diseases. We are very excited to partner with Sanofi and expand our RIPK1 program into new indications," said Ryan Watts, chief executive of Denali.

"With its considerable infrastructure and experience in both clinical development and commercial functions, Sanofi is an ideal partner for Denali to maximize the clinical and commercial success of our RIPK1 program."