Astellas Pharma, based in Tokyo, and Anokion, a Switzerland-based biotechnology company, have inked a $760 million agreement to collaborate on type 1 diabetes and celiac disease.

A new company, Kanyos Bio, based in Cambridge, Mass., has been created to develop clinical candidates in the two selected indications, with an option for Astellas to add a third autoimmune indication as part of the collaboration. Astellas will provide non-dilutive research funding to Kanyos and holds an option to acquire Kanyos after reaching certain milestones.

Total potential deal value of about $760 million includes R&D funding, option exercise and milestone payments. Astellas also will participate, along with Anokion’s existing investors, in a $16 million equity financing for Kanyos.

Anokion is developing products based on proprietary technology for the induction of antigen-specific immune tolerance. The technology targets antigens to the surfaces of red blood cells in vivo; as the cells circulate, age and are cleared, the associated antigens are processed using the immune system’s natural mechanisms to prevent autoimmunity. Anokion’s technology has demonstrated the ability to induce immune tolerance to protein drugs and to autoimmune antigens in animal models. The creation of Kanyos will enable preclinical development of products for type 1 diabetes and celiac disease.