Celgene, a Summit, New Jersey-based biopharmaceutical company, has agreed to acquire Delinia, a privately held biotechnology company headquartered in San Francisco that develops therapeutics for autoimmune diseases, in a deal worth $775 million.

Under the agreement, Celgene will make an initial payment of $300 million. Delinia shareholders will be eligible to receive up to an additional $475 million in contingent payments upon achievement of certain development, regulatory, and commercial milestones.

With the acquisition, Celgene boosts its inflammation and immunology pipeline with Delinia’s lead program, DEL106, as well as related second-generation programs. DEL106 is an interleukin (IL)-2 mutein Fc-fusion protein designed to upregulate regulatory T cells (Tregs), which are immune cells that maintain natural self-tolerance and immune-system homeostasis. Delinia seeks to augment Tregs as a means of restoring immune system balance in autoimmune diseases such as systemic lupus erythematosus and rheumatoid arthritis.

The transaction is anticipated to close in the first quarter of 2017.

Source: Celgene