Biogen will pay Carlsbad’s Ionis Pharmaceuticals $1 billion as part of a 10-year collaboration around neurological drug development.

In exchange for the $1 billion payment, Massachusetts-based Biogen will have the option to license therapies arising from the deal. Ionis will be responsible for identifying drug candidates, while Biogen will handle non-clinical studies, clinical development, manufacturing and commercialization.

This marks an expansion of the companies’ partnership, as Biogen commercialized Ionis’ Spinraza for spinal muscular atrophy. Spinraza generated $884 million in 2017 sales, exceeding expectations.

Biogen’s $1 billion payment includes $625 million to purchase 11,501,153 shares of Ionis common stock, as well as a $375 million upfront payment. The deal is expected to close in the second quarter.

Ionis is also eligible for milestone payments, license fees and royalties on net sales.

“This new collaboration’s financial terms, upfront payment, milestone payments, and royalties are substantially higher compared to our previous collaborations with Biogen, which demonstrates the value we have created in applying Ionis’ antisense technology platform to neurological disease,” said Ionis CEO Stanley Crooke in a news release.

Ionis’ stock traded at $48.57 at noon, an increase from yesterday’s close of $45.85.

The collaboration will focus on dementia, neuromuscular diseases, movement disorders, ophthalmology, diseases of the inner ear and neuropsychiatry.