The Anglo-Dutch multinational, the world's largest consumer products group, is farming out the development of a baldness prevention compound to Bristol-Myers Squibb, the US pharmaceutical giant.
Researchers at Unilever came across a compound that might prevent baldness by accident in the late 1980s. They were conducting separate research into shampoo and hair care, one of the group's main product areas.
The technology to produce the compound was patented but sat on Unilever's shelves until this year, when the company decided to develop its book of intellectual property rights.
Under the deal, Bristol-Myers Squibb will take over development of the product and try to produce a compound available by prescription. In return it will pay an initial fee plus royalties if the compound comes to market. Successful development could also lead to the drug being sold over the counter.
The deal gives Unilever "milestone" payments as the drug clears regulatory hurdles on its way to the market. The compound will take around five years to develop.
Dr Lincoln Krochmal, senior vice-president of Unilever, said this was the first time Unilever had licensed its technology to another company to develop a prescription product.
"This ground-breaking agreement not only gives Bristol-Myers Squibb access to proven scientific technology, it provides Unilever with potential commercialisation of a technology which was not being advanced to the market place," said Dr Krochmal.
Shares rose ahead of the market, closing up 44p at 520p, valuing Unilever at pounds 40bn.Reuse content