Astellas Pharma and Maxygen will establish a joint venture focused on the discovery, research and development of multiple protein pharmaceutical programs, including Maxygen’s MAXY-4 program and other early stage programs. As part of the arrangement, Astellas will have an option to acquire all of Maxygen’s ownership interest in the joint venture within three years of the joint venture. The arrangement expands the two companies existing MAXY-4 collaboration in autoimmune diseases and transplant rejection.

Maxygen will contribute all of its programs and technology assets in protein pharmaceuticals, as well as $10 million in cash for the new JV. Maxygen's ownership interest will be approximately 83%. Astellas will also invest $10 million and will have a 17% ownership interest. Should Astellas acquire Maxygen’s ownership interest at specified exercise prices, the increase each quarter will go from $53 million to $123 million during the three-year term of the option. Grant Yonehiro, Maxygen’s chief business officer, is expected to serve as chief executive officer of the venture.

Under a separate collaboration agreement, Astellas will fund all of the costs, as much as $30 million over the three-year option term, for the discovery, research and development of multiple protein therapeutics (other than MAXY-4) by the JV. Astellas will be granted an option to obtain a license to one product developed by the venture under this collaboration, if Astellas does not exercise its buy-out option during the option term. Development costs for the MAXY-4 program will be shared by the JV under the terms of the existing MAXY-4 collaboration agreement.

In the event Astellas does not exercise its buy-out option, all rights to the protein therapeutics developed through the JV will be retained by the JV, and Astellas will provide as much as 18 months of transition funding to it.

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