GlaxoSmithKline (GSK.US) and Flagship Ventures have agreed to a multi-billion-dollar drug development deal.

GlaxoSmithKline (GSK.US) and Flagship Pioneering Inc., a top venture capital firm, have agreed to develop more than 10 new drugs, a deal that could pay the biotech-backed company more than $7bn.

According to a statement on Monday, GlaxoSmithKline and Flagship will jointly provide up to $150m in upfront payments to explore new treatments for respiratory and immunological diseases. If the 10 drugs reach all development and commercial milestones, GlaxoSmithKline will pay up to $720m per drug, including the upfront payments.

Emma Walmsley, chief executive, is trying to diversify GlaxoSmithKline’s product portfolio, and the deal with Flagship (the venture capital firm behind US vaccine maker Moderna (MRNA.US)) is designed to expand the areas the drug giant has been trying to expand. Earlier this year, GlaxoSmithKline agreed to pay up to $1.4bn for Aiolos Bio Inc, a US biotech company developing an experimental asthma drug.