Novartis AG agreed to buy the rights to an experimental multiple sclerosis drug from GlaxoSmithKline Plc for as much as $1 billion as it races to catch up with a competing treatment being developed by Roche Holding AG.

Novartis will pay $300 million upfront to Glaxo for ofatumumab, followed by another $200 million after the start of late-stage clinical trials, the Basel, Switzerland-based company said in a statement on Friday. Novartis may pay as much as $534 million more if certain goals are met during the drug’s development.

The drug would compete with Roche’s experimental medicine ocrelizumab, which succeeded in reducing the relapses and disability progression associated with multiple sclerosis in two late-stage studies announced in June. That treatment may reach the market in 2017, while the Novartis drug would be at least two years behind, said Fabian Wenner, an analyst at Kepler Cheuvreux in Zurich.

“It’s a joke,” Wenner said by phone. “Patients either want better convenience than the old drugs or they want better efficacy, and ofatumumab is offering neither of those things. The chances of this being successful in MS and generating any sales are zero in my view.”

Novartis didn’t immediately respond to a phone call and an e-mail seeking additional comment. The shares fell 1.5 percent to 96.05 euros as of 10:55 a.m. in Zurich, amid a decline in European stocks. Shares of Glaxo dropped 1.2 percent.

Patent Expiry

More than 2.3 million people suffer from multiple sclerosis, a progressive central nervous system disorder that disrupts brain and spinal-cord functioning. Ofatumumab and ocrelizumab attack a type of white blood cell in the immune system that is a key contributor to spinal-cord damage.

Novartis already has an MS treatment called Gilenya, which was the company’s second-biggest seller last year, with sales of $2.5 billion. That drug will lose patent protection as early as 2019. The company needs a successor to “soften the blow,” said Michael Leuchten, an analyst at Barclays Plc in London. Still, ofatumumab will be significantly behind Roche’s product, Leuchten said.

“It fits strategically, but from a timing perspective there’s going to be quite a gap,” he said.

Novartis will also pay royalties of as much as 12 percent to Glaxo on any future net sales of ofatumumab for autoimmune conditions. Novartis had previously acquired rights to the medicine as a cancer treatment, marketing it under the brand name Arzerra.

Novartis and London-based Glaxo completed a deal in March in which the Swiss company gained cancer drugs and London-based Glaxo added to its vaccines business. The two also created a consumer health joint venture.

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