Drug company GlaxoSmithKline P.L.C. today said it will pay an Ann Arbor, Mich., company an initial $14.5 million to license a new over-the-counter compound for cold sore treatment.

The agreement with NanoBio Corp. provides for added milestone payments of up to $40 million, plus royalties on future sales.

NanoBio's treatment, NB-001 has shown efficacy and safety in two Phase 2 clinical trials, the companies said.

The medication provides antimicrobial activity against the virus that causes cold sores, herpes labialis, they said.

Glaxo's existing over-the-counter cold sore medication, Abreva, has a 50 percent market share, according to Glaxo.

London-based GlaxoSmithKline has large operations in Philadelphia.    - Reid Kanaley