Swiss drugmaker Novartis and Human Genome Sciences (HGS), based in Maryland, have entered into an agreement to develop and commercialize Albuferon (albumin-interferon alpha 2b) for chronic hepatitis C and all other uses.

Under the agreement, HGS and Novartis will co-commercialize Albuferon in the U.S., and will share U.S. commercialization costs and U.S. profits equally. Novartis will be responsible for commercialization outside the U.S. and will pay HGS a royalty on those sales. The companies will share equally in clinical development costs.

HGS will receive an upfront fee of $45 million. Clinical development, commercial milestone and other payments to HGS could total as much as $507.5 million, including $47.5 million when the first patient is dosed in a Phase III clinical trial. HGS will have primary responsibility for the bulk manufacture of Albuferon.

HGS expects to initiate Phase III clinical development of the drug by the end of 2006, said the company.