Sumitomo Dainippon Pharma Co. Ltd. will pay up to ?3.7 billion for the right to develop a substance using JCR Pharmaceuticals Co. Ltd.'s technology.

The payment is made up of an unspecified upfront amount plus further consideration related to the achievement of certain milestones.

JCR's J-Brain Cargo blood-brain barrier penetration technology is used in creating therapeutic agents for central nervous system diseases, including JR-141, which is being studied as a treatment for Hunter syndrome.

Sumitomo Dainippon, which is based in Japan, will have the rights to market the substance in the country, as well as North America. It may opt to secure the rights to the drug in China as well.

JCR Pharmaceuticals, which is also based in Japan, will also receive royalties on the sales of the drug once it is commercialized.

As of Feb. 23, US$1 was equivalent to 106.64 Japanese yen.