The drugmaker has agreed to pay that much for the licensing rights to Actelion’s investigational drug, almorexant.

Under the terms of the agreement, Glaxo will receive exclusive worldwide rights (excluding Japan) to co-develop and co-commercialise the compound, a first-in-class orexin receptor antagonist which is in Phase III trials. This type of drug is supposed to block receptors for brain chemicals that maintain wakefulness and regulate the sleep-wake cycle.

In a statement, Moncef Slaoui, who heads Glaxo R&D, says that, “by targeting orexin, which is known to help regulate the sleep-wake cycle, these novel molecules could help to reduce or even eliminate some of the side-effects associated with current sleep treatments.”

“As we noted previously, this was likely to be - and now is - a landscape-changing deal for Actelion and a significant deal for (Glaxo). It gives both companies a seven-year lead over the nearest competitor in the insomnia and related indications,” Goldman Sachs analyst Stephen McGarry wrote in an investor note, according to Reuters.