Evotec AG said it entered a drug discovery and development collaboration with Celgene Corp. to identify disease-modifying therapeutics for neurodegenerative diseases.

The collaboration, with an initial term of five years, is based on Evotec's induced pluripotent stem cell platform. Under the agreement, Evotec will receive an upfront payment of $45 million, and could receive up to $250 million in milestone payments plus low-double-digit royalties on in-license programs.

Celgene holds exclusive options to in-license worldwide rights to Evotec's programs developed from the company's compound library.

Hamburg-based Evotec is a drug discovery alliance and development partnership company. Summit, N.J.-based Celgene develops products for treatment of cancer, immune and inflammatory conditions.