Months after giving up on its IPO hopes last year — when the market was especially brutal for lifescience companies — Bayhill Therapeutics has landed a licensing deal worth $25 million in upfront cash and equity with Genentech. It could bring in as much as $325 million more if it hits certain sales and regulatory milestones, joining the ranks of several biotech firms that ditched public offerings for lucrative equity deals, VentureWire reports (citing Elixir Pharmaceuticals and Xanodyne Pharmaceuticals as examples).

Genentech has essentially acquired Bayhill’s therapy for type I diabetes, with plans to absorb research, development and commercialization rights and costs as soon as the current clinical trial is complete. San Mateo, Calif.-based Bayhill will reserve the right to co-market the drug in North America.

The company has several other therapies in the works — including a treatment for multiple-sclerosis — and is looking for further licensing deals to advance their development. Earlier this year it made agreements — each worth $3 million — with the Juvenile Diabetes Research Foundation and the Iacocca Foundation.

Since its inception in 2002, Bayhill raised about $90 million in capital from Boston Life Science Venture, CMEA Capital, De Novo Ventures, Grand Cathay Venture Capital, Latterell Venture Partners, Lilly Ventures, Montreux Equity Partners, Morgenthaler Ventures, Pac-Link Management, Pappas Ventures, PharmaBio Development, Prudence Venture Investment, Quintiles PharmaBio Development, U.S. Venture Partners and Vertical Group.

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