NEW YORK (AP) — TransTech Pharma Inc. and Forest Laboratories Inc. said Tuesday they entered a license agreement potentially worth more than $1.1 billion for the development of diabetes drugs.

Under the deal, Forest will pay privately held TransTech $50 million upfront and more than $1.1 billion if the drugs meet certain development and commercial milestones.

Forest Laboratories, based in New York, will also pay TransTech Pharma royalties on worldwide product sales and will be responsible for development and commercialization costs.

TransTech Pharma, based in High Point, N.C., retains the rights to the Middle East and North Africa, while Forest receives exclusive rights to the rest of the worldwide market.