AbbVie (NYSE: ABBV), a United States-based biopharmaceutical company, announced on Tuesday that it has entered into an exclusive worldwide collaboration with an option to license agreement with US-based HotSpot Therapeutics, Inc., a biotechnology company, for HotSpot's discovery-stage IRF5 program to treat autoimmune diseases. IRF5, a transcription factor that acts as a key regulator of certain types of immune responses and its dysregulation, is strongly associated in various poorly treated autoimmune disorders.

According to the terms of the contract, HotSpot will receive an upfront cash payment of USD40m and is likely to be eligible to receive up to USD295m in option fees and research and development milestones, with potential for further commercial milestones and tiered royalties on global net sales. If AbbVie exercises its option to license, then it will conduct all future clinical development, manufacturing and commercialisation activities for the IRF5 inhibitor program. HotSpot will also have a one-time option to share in global R&D costs in exchange for increased royalty payments.

The financial advisor to HotSpot on this transaction is Aquilo Partners, LP.