UPDATE 1-Biogen, Genentech developing new blood cancer drug

* Biogen, Genentech broaden cancer-drug relationship

* To pay Genentech $31.5 mln upfront to co-develop drug

* Says drug in early stages of testing

* Shares unchanged after hours at $40.30

Biogen Idec (BIIB.O: Quote, Profile, Research, Stock Buzz) said on Thursday it would help Genentech Inc (DNA.N: Quote, Profile, Research, Stock Buzz) develop an experimental cancer treatment that works through a similar mechanism as their shared blockbuster Rituxan treatment for non-Hodgkins lymphoma.

Genentech recently acquired U.S. rights to the new medicine, called GA101, from Roche Holding AG (ROG.VX: Quote, Profile, Research, Stock Buzz), the Swiss drugmaker that has a majority stake in Genentech and is attempting to acquire its remaining shares.

Biogen said it opted to help develop GA101 pursuant to terms of its ongoing Rituxan collaboration with Genentech, and will make an upfront payment of $31.5 million to its larger partner and record it as a fourth-quarter charge.

The companies will share operating profits and losses in the United States, Biogen said, while Roche retains rights in other markets. Additional terms were not disclosed.

Like Rituxan, GA101 works by targeting immune system cells known as CD20-positive B cells. It is being studied in early-stage trials for non-Hodgkins lymphoma and chronic lymphocytic leukemia, another type of blood cancer, Biogen said.

Biogen said Roche would provide an update on Phase 1 data for the new medicine at a medical meeting in December, Biogen said.

Biogen shares closed down 3.9 percent at $40.30 on Thursday. (Reporting by Ransdell Pierson)