Eli Lilly and Company has entered a strategic collaboration to co-develop Nektar Therapeutics’ new immunological therapy NKTR-358.

Having achieved the first human dose in Phase I clinical development in March this year, NKTR-358 can be used to treat a wide range of autoimmune and other chronic inflammatory conditions.

Discovered by Nektar Therapeutics, the treatment is a potential first-in-class resolution therapeutic that can address an underlying immune system imbalance in patients with several autoimmune conditions.

NKTR-358 targets the interleukin (IL-2) receptor complex in the patient’s body to stimulate proliferation of powerful inhibitory immune cells, known as regulatory T-cells.

The treatment is capable of activating these regulatory T-cells to bring the immune system back into balance, thereby resulting into healthy organ function in autoimmune conditions.

Nektar president and CEO Howard Robin said: "We are very pleased to enter into this collaboration with Lilly as they have strong expertise in immunology and a successful track record in bringing novel therapies to market.

"Importantly, this agreement enables the broad development of NKTR-358 in multiple autoimmune conditions in order to achieve its full potential as a first-in-class resolution therapeutic."

Under the deal, Nektar Therapeutics will receive an initial payment of $150m and will be eligible for up to $250m in additional development and regulatory milestones.

The two companies will be jointly responsible for the manufacturing of NKTR-358, while Nektar will be responsible for completing the Phase I clinical development.

The Phase II development cost will be shared by both companies, with 75% investment from Lilly and the remaining 25% from Nektar Therapeutics.

In addition, Nektar will have the option to participate in Phase III development on an indication-by-indication basis.

Lilly will be responsible for all costs related to global commercialisation, while Nektar will have a provision to co-promote NKTR-358 in the US under certain conditions.