Eli Lilly and Co. entered a collaboration to develop and commercialize Aduro BioTech Inc.'s gene inhibiting program to produce immunotherapies for autoimmune and other inflammatory diseases.

Under the agreement, Indianapolis-based Lilly will pay an up-front fee of $12 million, and Aduro will be eligible for development and commercial milestones up to $620 million per product, as well as royalties.

Berkeley, Calif.-based Aduro's cGAS-STING program is designed to find and develop inhibitors of the intracellular stimulator of interferon genes, or STING, which can influence the immune response associated with various autoimmune diseases. In such diseases, the body's immune system attacks healthy tissue.

The companies will collaborate to advance drug candidates discovered with Aduro's technology, as well as others from Lilly, into clinical development.

Lilly will pay for all costs of global commercialization and Aduro will receive funding during the research period. Aduro has the option to co-fund the clinical development of each product in exchange for an increase in royalty payments.

Lilly said the transaction will not change its non-GAAP EPS guidance for 2018.

Earlier in December, Lilly announced that it would acquire a preclinical pain drug program from Hydra Biosciences Inc.