DARA Biosciences will pay an unspecified up-front fee to Bayer Pharmaceuticals for rights to patents and compounds for potential drugs to treat type 2 diabetes and other disorders, the companies said Wednesday.

DARA announced plans a week ago to merge with Point Therapeutics, a smaller life science firm, and to go public. DARA did not disclose the financial details of its agreement with Bayer.

The lead compounds in the deal are already in pre-clinical development, DARA said. DARA also will pay Bayer milestone payments and royalties. Bayer also has some rights to commercialize products related to the program.

"DARA BioSciences’ licensing-in of the Bayer technology demonstrates our
commitment to exploring new alternatives in the treatment of metabolic
diseases, including diabetes,” said DARA Chief Executive Officer Richard Franco.