(Reuters) - GlaxoSmithKline (GSK.L) said on Monday it will partner with venture capitalists Avalon Ventures in a deal worth up to $495 million (£323.66 million) to fund as many as 10 drug-discovery startup companies over the next three years.
GSK will provide financing and technical support to startups established by Avalon Ventures and will have first rights on buying each new company, GSK spokeswoman Melinda Stubbee said.
Avalon will contribute up to $30 million to the collaboration, and Glaxo will provide as much as $465 million in initial funding and development milestone payments, Stubbee said.
Big drugmakers see early-stage venture investing as a proxy for expensive in-house drug development, and some have set up their own venture funds.
Stubbee said each startup would have just a few employees, focusing on a single compound to develop treatments for conditions ranging from cancer to infectious diseases.
(Reporting by Susan Kelly in Chicago; Editing by Phil Berlowitz)