Targegen Inc., a San Diego biotech developing a drug to treat blood diseases, agreed to be acquired by Sanofi-Aventis, a French public company for what could be $560 million if the company reaches certain milestones, the local firm said June 30.

Formed in 2001, Targegens most advanced drug is TG101348, which has completed second phase clinical trials and is in the process of the final round of trials involving larger numbers of patients. The drug could potentially be used to treat certain types of leukemia, lymphoma and other types of malignancies and blood disorders, the firm said.

The deal calls for Sanofi-Aventis to advance $75 million, and make payments as the firm continues its drug development. The transaction is expected to be completed in the third quarter.

– Mike Allen