Fusion IP, which commercialises university research, has signed an agreement with a pharmaceutical company utilising intellectual property out of the University of Sheffield, for the development of a known drug.
The agreement, which is worth over $500m per year is royalty-based, with limited milestone payments, will cover most of Fusion's net annual overheads.
The drug is already being marketed for a different treatment and as such the probability of a successful launch is considered to be high, the firm said.
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The drug is currently at the second stage of development and is expected to make its first sales in 2015/16, with royalties to Fusion expected to peak at £1m per year.
Dr Andrew Tingey, Head of Licensing at Fusion, said: "This is an excellent licence for Fusion and demonstrates the value that can be unlocked through licensing the non spin-out opportunities within the Fusion pipeline."
The share price rose 10.39% to 42.5p by 12:40.
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