U.S. drugmaker Cephalon has announced that it will take a 20 percent stake in Australian biotechnology company Mesoblast as part of an alliance to develop and market stem cell treatments for degenerative conditions of the cardiovascular and central nervous systems.

The deal calls for Malvern, Pa.-based Cephalon to pay Mesoblast $130 million upfront and another $220 million for the 20 percent stake in the Melbourne-based company, Reuters reports. Depending on the performance of the stem cell treatments to be produced, the transaction could be worth up to $1.7 billion, according to The New York Times‘ DealBook.

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