GlaxoSmithKline has signed a deal worth up to $1.5 billion (£854 million) with Cellzome, an Anglo-German biotech group, as it seeks to bolster its pipeline by licensing promising new drugs from outside companies.

Cellzome, which is developing experimental drugs that could provide treatments for rheumatoid arthritis, multiple sclerosis and other inflammatory diseases, will receive an initial payment of £14.4 million in cash and equity.

It will get as much as £118 million per programme in potential development, regulatory and commercial milestones and up to double-digit royalties on future sales.

The deal is a boost for the small company, which has researchers in Cambridge and Heidelberg, Germany, and is a boost for the British biotech industry. However, the privately owned group is unlikely to receive the bulk of the payments for some time.

The deal is also a symptom of the problems besetting the British biotech scene. Small companies rarely manage to get their products to market without them being snapped up by bigger companies along the way.

All of Cellzome's drugs are still in development. None has reached the stage where it can be tested on human beings and it will be years before the drugs are submitted for regulatory approval - if they make it that far.

Yesterday's announcement is the latest in a string of deals by Glaxo. It comes weeks after Andrew Witty, the group's new chief executive, said that the company would abandon its “big is beautiful” model and run its businesses more like small biotech outfits.

Two months ago Glaxo announced a $3 billion tie-up with Actelion, its largest deal to date, giving Britain's largest drug maker rights to Almorexant, the Swiss biotech company's sleeping pill, which is in the final stage of clinical trials.

Cellzome says that its drug discovery technology could lead to a new generation of tablet treatments for inflammatory diseases. The proprietary Kinobeads technology screens cells and tissues for compounds likely to work against kinases - molecular switches in the body with a central role in inflammatory responses.

Cellzome says that the approach could also be used to find new medicines for other disorders, including Parkinson's disease and cancer.

While Mr Witty is shaking up Glaxo's strategy, Chris Viehbacher, his former rival for the top job at the group, who resigned this week, has shaken up the industry with his appointment as chief executive of Sanofi-Aventis, the French drug maker.

The French-speaking 48-year-old, who has dual German and Canadian citizenship, replaces Gerard Le Fur at the third-largest drug maker by pharmaceutical sales, in December. Mr Viehbacher will become one of very few non-French chief executives of a big Paris-listed company.

Shares in Sanofi surged by more than 7 per cent after the news in the biggest daily advance for more than two years, fuelled by hopes that the changeover would mean a fresh strategy at the group, which has struggled to get new drugs to market.

There have been reports of friction among top management, particularly between Mr Le Fur and Jean-François Dehecq, chairman, who helped to found the group.

Mr Le Fur, 68, will stay on in a scientific advisory role.

Mr Viehbacher was one of two top executives who lost out to Mr Witty in the race to succeed Jean-Pierre Garnier as the head of GlaxoSmithKline. He will forfeit a £2.5 million retention package offered by management as an enticement to stay on.

Sanofi-Aventis shares have lost 30 per cent of their value since Mr Le Fur became chief executive in January last year.

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