Ionis Pharmaceuticals (IONS) rocketed in early trading Friday after announcing a $1 billion deal with Biogen (BIIB) to develop treatments for neurological diseases like dementia, following up the success they’ve had with Spinraza.

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Shares of Ionis popped 5.8% to close at 48.51 on the stock market today. Biogen dipped 1.1% to 263.02.

The firms plan to work on neurological diseases including dementia, neuromuscular diseases, movement disorders, ophthalmology, inner-ear diseases and neuropsychiatry. The deal leverages Ionis’ technology, called antisense, to identify potential drug candidates.

“With the large number of diseases that could benefit from Ionis’ antisense platform, we believe that the time is now to build upon our highly productive collaboration with Ionis as we aim to transform the treatment of neurological diseases around the world,” Biogen Chief Executive Michel Vounatsos said in a written statement.

Biogen And Ionis Deepen Partnership

Under the terms of the deal, Biogen will pay Ionis $1 billion. That includes $625 million to buy more than 11.5 million shares of Ionis stock at $54.34 — a 25% cash premium — and $375 million upfront.

Biogen will be able to license therapies developed with Ionis, and will be responsible for development and commercialization. In addition, Biogen may pay Ionis milestones, license fees and royalties on sales of those drugs.

The deal announced Friday extends the collaboration under which the two companies developed Spinraza, a treatment for spinal muscular atrophy. In 2017, Spinraza brought in $884 million in sales, Biogen reported. Ionis received $122 million from Spinraza royalties and licensing.

“There is no better partner for Ionis to develop new antisense drugs to treat neurological diseases than Biogen,” Ionis Chief Executive Stanley Crooke said in a prepared statement. “Their demonstrated perseverance, dedication and commitment to innovation in developing drugs for these challenging diseases is unmatched.”

Biogen and Ionis expect the deal to close in the second quarter.

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