Roche Group member Genentech has entered into a definitive agreement to acquire the US-based biotechnology company Seragon Pharmaceuticals.

Under the tagreement, Seragon Pharmaceuticals will receive an upfront cash payment of $725m from Genentech and additional contingent payments of up to $1bn based on achievement of certain predetermined milestones.

Subject to customary closing conditions, the transaction is expected to be complete in the third quarter of 2014.

Following completion, Seragon Pharmaceuticals' entire portfolio of investigational next-generation oral selective estrogen receptor degraders (SERDs) for the potential treatment of hormone receptor-positive breast cancer will be integrated into Genentech Research and Early Development.

Genentech said that SERDs will complement existing research and development programmes in breast cancer.

Genentech Research and Early Development executive vice-president Richard Scheller said: "We believe these investigational oral SERDs could one day redefine the standard of care for hormone receptor-positive breast cancer."

Seragon Pharmaceuticals has developed the next-generation SERDs to both block estradiol action at the estrogen receptor and also eliminate the estrogen receptor from the cell altogether.

SERDs are expected to change the shape of the estrogen receptor in a manner that targets it for elimination by the cell.

According to Seragon Pharmaceuticals, the next-generation dual-acting SERDs may offer an improved approach to treating hormone receptor-positive breast cancer, and potentially other cancers driven by the estrogen receptor.

Seragon's next-generation SERD ARN-810 is currently in Phase I of clinical trials in patients who have hormone receptor-positive breast cancer and have failed current hormonal agents.