Biotechnology company ViroPharma Inc. said Friday it paid $6.5 million to acquire rights from Intellect Neurosciences Inc. to a potential drug being developed as a treatment for a rare hereditary disease that damages the nervous system.

ViroPharma, based in Exton, Pa., said the deal also includes potential milestone payments that could total $120 million and royalty payments based on sales, if the drug is eventually approved.

Intellect Neurosciences, which is based in New York, agreed to transfer to ViroPharma all of its intellectual property rights and data to its research-and-development program for the potential drug, labeled OX1.

OX1 is being developed to treat Friedreich's Ataxia, a rare disease for which there are no treatments approved by the Food and Drug Administration. The disease is caused by a gene mutation and can lead to nervous system damage that results in symptoms like speech problems.

ViroPharma said Friedreich's Ataxia also can lead to heart disease and diabetes.

The company plans to start a mid-stage study of the drug about 12 to 18 months after a longer-term toxicology study is completed. ViroPharma also plans to file for an orphan drug designation for the potential treatment. Regulators grant this status to drugs for rare illnesses or diseases for which there is no treatment. It comes with incentives and includes marketing exclusivity if the product is approved.

ViroPharma shares slipped 8 cents to $18.31 in morning trading Friday.