Bristol-Myers Squibb Co. said Monday that it has been granted the exclusive right to buy privately held Promedior Inc. and its experimental fibrosis treatment for up to $1.25 billion.

Under the terms of the agreement, Bristol-Myers will pay $150 million in cash up front for the right to buy Promedior. Bristol-Myers can exercise that right after Promedior completes either of two phase-two trials for the treatment PRM-151.

Promedior expects to begin clinical trials of the treatment for idiopathic pulmonary fibrosis and myelofibrosis patients in the coming weeks. PRM-151 has been granted fast-track designation and orphan designation.

Fibrosis is associated with several rare diseases and illnesses such as age-related macular degeneration and solid tumors. Fibrosis occurs when healthy tissue is replaced with scar tissue, which can compromise function and lead to organ failure.

Bristol-Myers said the drug will complement its early-stage fibrosis portfolio. The company last year signed an option agreement to buy Galecto Biotech AB, a company with an inhaled inhibitor for the treatment of idiopathic pulmonary fibrosis.

Write to Chelsey Dulaney at Chelsey.Dulaney@wsj.com

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(END) Dow Jones Newswires

August 31, 2015 09:25 ET (13:25 GMT)

Copyright (c) 2015 Dow Jones & Company, Inc.
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