GlaxoSmithKline announced Monday it will invest up to $7.2 billion in a biotech venture capital firm's research and development pipeline, focusing on treatments for respiratory and immune problems.

Strategic Collaboration with Flagship Pioneering

As part of the strategic collaboration between GSK PLC and Flagship Pioneering, GSK will select up to 10 new medicines and vaccines from Flagship's portfolio of companies for further clinical development. Initially, the VC and GSK will invest $150 million to kickstart the partnership.

Each new medicine will be entitled to up to $720 million from the drugmaker as the program progresses from the initial stage to its commercial release, according to GSK.

GSK To Put Up To $7.2B Into Biotech VC's Pipeline : Promising Scientific Concepts

Tony Wood, GSK's chief scientific officer, said the alliance with Flagship will enable the two companies to deliver "best-in-class innovation."

"We look forward to partnering with the talented team at Flagship, and their ecosystem of bioplatform companies, to further accelerate our pipeline and discover practice-changing medicines and vaccines for patients," Wood said in a statement.

GSK and Flagship Pioneering said the collaboration will start by identifying the most "promising scientific concepts" from Flagship's portfolio of 40 companies, which includes pharmaceutical giants like Moderna and Omega Therapeutics.

Initial Funding and Development

The two companies have committed to jointly fund an initial injection of $150 million for Flagship's portfolio of companies. This funding will assist in the "exploration phase" of the companies' most promising projects and ideas, initially focusing on respiratory and immunology fields.

GSK will hold an exclusive option over the 10 selected research projects for potential future clinical development. In addition to the $720 million from GSK, the chosen medicines and vaccines will also be entitled to preclinical funding and tiered royalties.

GSK To Put Up To $7.2B Into Biotech VC's Pipeline : Shared Focus on Innovation

Flagship's general partner, Paul Biondi, emphasized the two companies' "shared focus" on delivering pioneering medicines.

Biondi stated the collaboration is part of the venture capital company's "Innovation Supply Chain Partnership model," developed to create and develop breakthrough medicines by forming strategic partnerships with pharmaceutical companies.