* Teva to make initial payment of $60 mln

* Teva to invest $10 mln in OncoGenex

* To buy OncoGenex shares at $37.38/shr

* OncoGenex to get up to $370 mln in milestones

* OncoGenex shares down 23 pct before the bell

Dec 21 - OncoGenex Pharmaceuticals Inc (OGXI.O) has entered into a licensing deal with Israel's Teva Pharmaceutical Industries Ltd (TEVA.O) (TEVA.TA) for its cancer therapy, and said Teva will make an equity investment in the U.S. company.

Shares of OncoGenex were trading down 23 percent at $23.20 before the bell. They closed at $29.65 Friday on Nasdaq.

Teva will give OncoGenex an initial payment of $60 million for OGX-011, which OncoGenex co-developed with Isis Pharmaceuticals (ISIS.O).

The initial payment by Teva includes a $10 million equity investment in OncoGenex common stock at $37.38 a share.

Also, OncoGenex will be eligible to receive up to $370 million in additional cash payments upon achievement of various regulatory and sales targets milestones.

The agreement provides us with capital resources for the development of OGX-011 through completion of the Phase III clinical trials and into product commercialization, OncoGenex Chief Executive Scott Cormack said in a statement.

OncoGenex will receive tiered royalties on sales of the product with the royalty percentage ranging from the mid-teens to the mid-twenties, and retains an option to co-promote OGX-011 in the United States and Canada.

The company has received a fast-track status for OGX-011 to treat progressive metastatic prostate cancer and prostate cancer indication. (Reporting by Anuradha Ramanathan in Bangalore; Editing by Unnikrishnan Nair) ((anuradha.ramanathan@thomsonreuters.com; within U.S. +1 646 223 8780; outside U.S. +91 80 4135 5800: Reuters Messaging: anuradha.ramanathan.reuters.com@reuters.net))