The collaboration will initially focus on Duchenne muscular dystrophy and two other undisclosed gene targets.

The Arcus platform has the ability to make a variety of efficient edits (knock-in, knock-out, and repair), enabling a range of therapeutic editing, according to the firms. The platform is based on a natural genome editing enzyme called I-Cel that evolved in the algae Chlamydomonas Reinhardt. It is a homing endonuclease that can be optimized for potency and specificity.

Under the agreement, Precision will receive an upfront cash payment of $100 million, as well as an equity investment by Lilly of $35 million in Precision's common stock. Precision will also be eligible to receive up to $420 million in potential development and commercialization milestones per product, as well as tiered royalties ranging from the mid-single digits to low teens on product sales upon successful commercialization.

Precision will lead preclinical research and investigational new drug-enabling activities and Lilly will be responsible for clinical development and commercialization. Lilly will have the right to select up to three additional gene targets for the collaboration. Precision can co-fund clinical development of one product in exchange for an increased royalty rate on this product's sales.