Maxygen Inc. said Friday it expects to receive about $17.8 million in cash in exchange for its equity interest in Avidia Inc. in connection with Avidia's acquisition by Amgen Inc.

Redwood City-based Maxygen (NASDAQ MAXY) said that in addition, it may receive up to $2.8 million more based on contingencies relating in part to the development of Avidia's lead drug, an interleukin 6 inhibitor designed to treat inflammation and autoimmune disease.

The acquisition of Mountain View-based Avidia by Thousand Oaks-based Amgen (NASDAQ AMGN) was completed on Oct. 24.

Under an agreement that Maxygen entered into with Avidia at the time of Avidia's formation, Maxygen retains exclusive rights to use Avidia technology to develop and commercialize products directed to more than 10 targets.

In July 2003, Maxygen, Dr. Pim Stemmer and a third-party investor formed Avidia as a spinout company from Maxygen. In connection with the spin-out, Maxygen transferred to Avidia certain technology and obtained exclusive licenses to use Avidia technology to develop and commercialize human therapeutic products for certain specific targets.

In September, Amgen agreed to buy venture-backed Avidia, a company with a drug candidate for autoimmune disease in Phase I trials, for $290 million in cash.