Basilea Pharmaceutica Ltd (SWX: BSLN) has entered into a licence agreement with ArQule (NASDAQ: ARQL) for its oncology drug candidate ARQ 087 (derazantinib), the company announced on Tuesday.

Derazantinib is orally administered and targets the fibroblast growth factor receptor (FGFR) family of kinases. It was developed by ArQule as a potential treatment for numerous solid tumours and is currently in a clinical study for intrahepatic cholangiocarcinoma (iCCA), a form of biliary tract cancer. It is also being investigated in a Phase Ib study involving patients with other solid tumours.

FGFR alterations have been identified as being potentially important therapeutic targets for numerous cancers, such as iCCA, bladder, breast, gastric and lung cancers.

The terms of the agreement state that ArQule will grant Basilea rights to research, develop, manufacture and exclusively commercialise derazantinib. ArQule will receive an upfront payment of USD10m from Basilea. ArQule will also be eligible to receive regulatory and sales milestone payments of up to USD326m upon the achievement of pre-specified clinical, regulatory and commercial milestones, as well as staggered single to double-digit royalties on sales upon commercialisation.

The exclusive licence is worldwide but excludes China, Hong Kong, Macau and Taiwan.