Bristol-Myers Squibb (BMS) will pay as much as $1.25 billion for the worldwide rights to a developing fibrosis drug as part of a deal that also gives it the right to buy the product’s developer.

The transaction includes an upfront payment of $150 million and allows the US drug major to take over Promedior, a clinical stage immunotherapy company pioneering the development of targeted therapeutics to treat fibrotic diseases.

Premedior’s prime drug candidate PRM-151, a recombinant form of human pentraxin-2 protein, is currently at the mid-stage development as a treatment for the lung condition idiopathic pulmonary fibrosis (IPF) and the bone marrow disorder myelofibrosis (MF).

Phase 2 trials both for IPF and MF applications are due to start in coming weeks, and BMS will be able to exercise its right to acquire Promedior upon completion of either of the trials.

PRM-151 has already been granted fast-track status in the US and Europe for treatment of IPF. In multiple preclinical models, the drug has been shown to regulate monocytes and macrophages at areas of tissue damage to prevent and reverse fibrosis, including IPF, acute and chronic nephropathy, liver fibrosis, and age-related macula degeneration.