At the beginning of this week, Jaguar Animal Health Inc (NASDAQ:JAGX) was trading for around $0.5 a share. By midafternoon on Tuesday, the company had risen to more than one dollar a share, and currently trades for around $0.78. The gains have come on the back of a collaboration agreement that will see the company partner up with one of the biggest names in healthcare on its lead product. If things run smoothly, there should be plenty of further upside to be had on this one as 2017 matures, and the partnership agreement starts to bear fruit. Here is what's important, and what we're looking for going forward as things develop.For those not familiar with Jaguar, as its name suggests, it is a healthcare company with a focus on animals. Specifically, it primarily develops assets targeting companion animals – dogs, cats, that sort of thing – for administration and prescription through veterinary practices in the US.While not as stringent, of course, the regulatory landscape for animal healthcare products in the US is similar in concept to that of the landscape for human healthcare products. A company must put a drug through its paces in clinical testing, and then submit an application to the FDA (and have the application approved), before being allowed to commercialize the product in question.In this instance, the product is called Canalevia, and it is a drug designed for the treatment of acute and chemotherapy-induced diarrhea (CID) in dogs. We won't go into too much detail with regards to the mechanism of action here, as it's not overly important. What we will say, however, is that chemotherapy has a very similar effect on dogs as it does on humans – hair loss, nausea, pain, diarrhea, etc. There are a number of approved drugs already available to allay some of these symptoms, but none that effectively relieve the diarrhea side effect. With Canalevia, Jaguar is trying to fill this gap.So, who is the partner?The company has teamed up with an entity called Elanco, which is the animal health subsidiary of healthcare behemoth Eli Lilly and Co (NYSE:LLY). The agreement grants Elanco exclusive global rights to the drug, and the two companies will collaborate on the global development of the product and on its commercialization in the US. Jaguar will receive an upfront payment of $1.5 million and additional payments upon achievement of certain development, regulatory and sales milestones, in an aggregate amount of up to $61 million. For a bit of perspective, Jaguar currently holds a market capitalization of just $11 million. The potential for up to $61 million in milestone payments when weighed against an $11 million market capitalization is why this company has run up over the last couple of days.So what is next?Well, we don't expect Eli to drag its heels as far as getting this one to market is concerned, so 2017 should bring with it plenty of development related (and hopefully, commercial related) catalysts for both Jaguar and Eli. Of course, these catalysts will impact Jaguar to a far higher degree than they will Eli, and this makes the company very much one to watch over the coming three quarters.Cash on hand came in a $2.8 million as of September 30, 2016, which for company of this size, is not too bad. Given that Eli is going to shoulder a large portion of the development costs for Canalevia, Jaguar shouldn’t burn through too much cash in getting this one to market, and by proxy, shouldn't need to raise too much dilutive capital near to medium term.We have seen how this company can move on news related to this asset, and as such, we expect some upside momentum near term as the collaboration matures.We will be updating our subscribers as soon as we know more. For the latest updates on JAGX, sign up below!Disclosure: We have no position in JAGX and have not been compensated for this article.