Swedish biotechnology company Cantargia AB (STO:CANTA) on Tuesday announced an agreement to sell its CAN10 IL1RAP immunology programme to Japanese healthcare company Otsuka Pharmaceutical Co Ltd.

Cantargia will receive an upfront payment of USD33m and may earn up to USD580m in development, regulatory and commercial milestone payments, along with tiered earn-outs from global product sales.

Otsuka Pharmaceutical will gain worldwide rights to develop, manufacture and commercialise CAN10 and will assume full responsibility for the programme going forward.

The agreement also includes the acquisition of 3G5, a pre-clinical backup antibody which is similar to CAN10, and grants Otsuka Pharmaceutical exclusive first negotiation rights on future IL-1RAP antibodies from Cantargia for two years.

CAN10 is designed to inhibit IL-1, IL-33 and IL-36, key cytokines in inflammatory and disease-related processes. It is currently in phase 1 clinical development.

The transaction is subject to regulatory approvals and standard closing conditions, with completion expected in the third quarter of 2025.