US drugmaker Bristol-Myers Squibb (BMS) has signed an agreement to acquire Padlock Therapeutics, a privately owned biotechnology firm based at Cambridge, Massachusetts, which specializes in creating new medicines to treat destructive autoimmune diseases.

BMS said the acquisition will give it full rights to Padlock’s Protein/Peptidyl Arginine Deiminase (PAD) inhibitor discovery program focused on the development of potentially transformational treatment approaches for patients with rheumatoid arthritis (RA).

The discovery program may have additional utility in treating systemic lupus erythematosus (SLE) and other autoimmune diseases, the company believes.

PADs are a family of enzymes that produce autoantigens which play an active role in the development and progression of RA and other autoimmune diseases. According to the US drugmaker, inhibiting PADs offers the potential to prevent progression of autoimmune diseases early in their evolution.

In identifiable high risk patients with pre- and early-RA, the company said the PAD inhibition could lead to a paradigm shift in treatment by preventing disease development and resulting joint destruction. PAD4 inhibition in combination with current standard of care therapies may increase and maintain the durable remission rates in RA patients with rapidly progressive disease, it added.

“Targeting PAD enzymes has the potential to be one of the most innovative mechanisms for treating autoimmunity, which both strengthens and accelerates our immunoscience pipeline,” said Francis Cuss, executive vice president and chief scientific officer at Bristol-Myers Squibb.

Michael Gilman, founder and CEO of Padlock Therapeutics said this also may make it possible to eliminate the antigens that drive autoimmunity with limited impact on the immune system, thereby creating breakthrough treatments.

The transaction, already approved by the boards of both companies, includes upfront and near-term contingent milestone payments of up to $225 million and additional contingent consideration of up to $375 million upon the achievement by Bristol-Myers Squibb of “certain development and regulatory events.”

Closing is expected for this year’s second quarter.