MeiraGTx Holdings has signed a deal with Eli Lilly, potentially worth over $475 million, granting the pharma giant rights to its experimental gene therapy for a rare, inherited disorder that causes severe vision loss from birth.

Shares of the gene therapy developer rose 11.7% on Monday after the news while Eli Lilly jumped 5% to record high.

Under the deal, MeiraGTx will get an upfront payment of $75 million and potentially over $400 million more in milestone payments. MeiraGTx is also eligible to receive tiered royalties on licensed products.

This marks Lilly's latest effort to tap the market for eye treatments and bolster its focus on gene therapies, after signing a deal valued at up to $261.7 million to buy gene therapy developer Adverum Biotechnologies ADVM.O in October. Adverum is developing an eye injection for wet age-related macular degeneration, or wAMD, a leading cause of blindness among the elderly.

MeiraGTx's experimental therapy, AAV-AIPL1, is being studied to treat one of the most severe forms of Leber congenital amaurosis 4, caused by mutations in the AIPL1 gene, and is delivered via subretinal injection to children.

Through a one-time administration, AAV-AIPL1 is designed to deliver functional copies of the AIPL1 gene to photoreceptors in the retina, to restore vision.

Lilly will also receive worldwide exclusive rights to MeiraGTx's gene therapy technologies for use in ophthalmology and gains certain rights to its proprietary riboswitch technology for use in gene editing in the eye.

(Reporting by Sahil Pandey in Bengaluru; Editing by Sahal Muhammed)

((Sahil.Pandey@thomsonreuters.com;))