Five Prime Therapeutics, Inc. (FPRX) announced that GlaxoSmithKline (GSK) has decided to exercise its option to gain an exclusive worldwide license to products containing an undisclosed muscle disease target developed by using Five Prime’s proprietary library of human extracellular proteins and target screening and discovery capabilities. The company gained 3.5% on the news.

With Glaxo exercising its option, Five Prime Therapeutics is entitled to receive $1.5 million. The company could receive up to $122.5 million on the achievement of preclinical, development and commercial-related milestones. Five Prime Therapeutics will also be eligible to receive royalties in the low- to mid-single-digit range on sales of products related to the target.

With Glaxo exercising its option, it will gain exclusive rights to the global development and commercialization of the products. The costs and expenses related to the products will be borne by Glaxo.

Five Prime Therapeutics’ association with Glaxo goes back to 2010 when the companies had signed an agreement for the discovery, development and commercialization of products for skeletal muscle disorders developed by using Five Prime Therapeutics’ protein target discovery platform.

Five Prime Therapeutics also has collaborations with other major companies like Bristol-Myers Squibb Co. (BMY) among others.

The Bristol-Myers deal, signed earlier this year, covers the discovery, development and commercialization of immuno-oncology treatments.

Five Prime Therapeutics is a Zacks Rank #3 (Hold) stock. A better-ranked stock in the biotech sector is Cambrex Corp. (CBM) carrying a Zacks Rank #1 (Strong Buy).

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