Boston startup Mitokyne has entered into an exclusive five-year collaboration with Japanese pharmaceutical Astellas focused on discovering and developing novel drugs that improve mitochondrial functions. The deal could be worth as much as $730 million to Mitokyne and Astellas gains an exclusive right to acquire the company in certain periods during the next five years.

“This R&D partnership is an excellent opportunity for Astellas to utilize more external capabilities and resources, and to undertake initiatives related to new therapeutic areas,” says Yoshihiko Hatanaka, president and CEO of Astellas.

Concurrent with the partnership, Astellas invested in Mitokyne’s $45 million series A financing, which included the participation of MPM Capital and Longwood Founders Fund.

Mitochondria are the energy factories of cells, generating the chemical energy needed for cell function. They are also involved in many other functions including fatty acid metabolism, cellular differentiation, and cell death regulation, among others. Drugs that improve mitochondrial function have the potential to treat genetic, metabolic, or neurodegenerative disorders as well as diseases of aging.

The partners hope to take advantage of the increasing understanding of the biology of mitochondria, along with new tools and assays available to better explain mitochondrial function and processes, to identify breakthrough treatments for patients suffering from mitochondria-related diseases.

Under their agreement, Astellas and Mitokyne will work together to discover and develop compounds that target mitochondrial function. Mitokyne will lead all the research and drug discovery activities and be responsible for delivering candidates for clinical testing. At that point, Astellas will assume all clinical development activities as well as commercialization. Mitokyne is also developing a new mitochondrial screening platform to enhance its R&D programs and identify new drug targets.

The total value of the partnership to Mitokyne could be as much as $730 million including upfront, R&D funding, acquisition, and milestone payments. According to their agreement, if Astellas’ chooses to acquire the biotech, it could pay more than $500 million.