South San Francisco-based Theravance Inc. has entered into a license, development, and commercialization agreement with Astellas Pharma, Inc., a Japanese corporation, for the development and commercialization of Theravance’s investigational antibiotic, Televancin.

Televancin is an injectable antibiotic, which is developed to be the first-line therapy for serious infections in hospital settings. Theravance seeks to establish in the trials that Televancin is superior to Vancomycin, the current standard of care treatment for such infections. Televancin is currently in phase 3 studies for the treatment of complicated skin and skin structure infections (“cSSSI”)and hospital-acquired pneumonia (“HAP”).

According to the Form 8-K, the agreement between Theravance and Astellas provides that on the effective date, Theravance will grant Astellas an exclusive license to develop and commercialize Televancin on a worldwide basis, except in Japan, and that Astellas will pay Theravance an up-front payment of $65 million. The Agreement also provides for Astellas to make clinical and regulatory milestone payments to Theravance of up to $156 million, including $136 million for completion of enrollment, filing, and approval in the ongoing Phase 3 programs in cSSSI and HAP, and $20 million if the Phase 3 data demonstrates televancin’s superiority over Vancomycin for patients infected with MRSA. Theravance will further receive royalties on global sales of televancin that range from the high teens to the upper 20s.

The Form 8-K also says that the terms of the agreement provide for Theravance to lead the development of Televancin for cSSSI and HAP and collaborate substantially with Astellas in marketing in the U.S. for the first three years. Astellas will lead all other development, regulatory, manufacturing, sales, and marketing activities worldwide, except Japan. Theravance will be responsible for all development costs for cSSSI and HAP, while Astellas will be responsible for substantially all costs associated with commercialization and further development of Telavancin.