Canada-based drug development company Sierra Oncology has acquired Gilead Sciences’ momelotinib, a drug candidate being developed to treat myelofibrosis, in a deal worth up to $198m.

Canada-based drug development company Sierra Oncology has acquired Gilead Sciences’ momelotinib, a drug candidate being developed to treat myelofibrosis, in a deal worth up to $198m.

The drug is a potent, selective and orally-bioavailable inhibitor of janus kinase 1 and 2 (JAK1 and JAK2), as well as activin receptor type 1 (ACVR1).

It was discovered and initially developed by Australian biotechnology firm Cytopia, which was acquired by YM BioSciences in 2011. YM BioSciences was later purchased by Gilead in 2013.

Under the terms of the latest agreement, Sierra will make an upfront payment of $3m for Gilead’s momelotinib, followed by additional aggregate milestone payments of up to $195m, based upon commercial sales of the drug.

Gilead will also receive tiered royalties on  momelotinib sales.

After the completion of transition period, Sierra will assume responsibility of all ongoing clinical trials of the drug candidate.

Sierra Oncology president and CEO Nick Glover said: “Opportunistically adding this compelling phase III asset to our existing pipeline of next generation oncology drug candidates, SRA737 and SRA141, helps establish Sierra as a diversified late-stage drug development company with a commercial orientation.

“Sierra is uniquely positioned to advance momelotinib towards potential registration with several members of the senior management team having key roles in its development.”

“The company is uniquely positioned to advance momelotinib towards potential registration with several members of the Sierra senior management team having played key roles in the development of momelotinib from its discovery through to phase III clinical trials.”

To date more than 1,200 patients have been treated with Gilead’s momelotinib since clinical studies commenced in 2009. The drug candidate has been recently evaluated in two Phase III clinical trials.

It was found to have a potentially differentiated therapeutic profile with anaemia-related benefits that included elimination or decrease in the requirement for frequent blood transfusions.

The drugcandidate also demonstrated substantive spleen and constitutional symptom control.