(Reuters) – Gilead Sciences (NASDAQ:) said on Saturday that it entered into a partnership with Denmark’s LEO Pharma to develop programs to treat patients with inflammatory diseases.

The Danish company will be eligible to receive up to $1.7 billion in payments which include an upfront payment of $250 million from Gilead.

In return, Gilead will have global rights to develop, manufacture, and commercialize the small molecule oral STAT6 (signal transducer and activator of transcription 6) program.

Targeting STAT6 has shown potential preclinically to treat a broad population of patients with inflammatory conditions such as atopic dermatitis, asthma, and COPD, the statement said.

LEO Pharma may receive tiered royalties ranging from high single-digit to mid-teens on sales of topical STAT6 products.

The transaction is expected to reduce Gilead’s GAAP and non-GAAP 2025 earnings per share by approximately $0.15 – $0.17.

“By partnering with LEO Pharma, we hope to explore the potential of the STAT6 pathway to bring forward an oral option for patients suffering from chronic inflammatory conditions,” said Flavius Martin, executive vice president of research at Gilead Sciences.