Yuhan and Gilead to develop NASH drug

Leading biopharmaceutical firm Yuhan announced an agreement with U.S. biotech firm Gilead Sciences on Monday that could lead to up $785 million in revenue.

Under the contract, the two companies will co-develop drug candidates and conduct clinical trials for a treatment targeted to cure nonalcoholic steatohepatitis (NASH), also known as fatty liver disease. In extreme cases, NASH can lead to cancer.

Yuhan’s research is still in the very early stages, with the company able to suggest to Gilead a group of molecules that could potentially be effective in tackling two target substances linked to the disease. The two companies will now work together on preclinical research to narrow that list down to the two most effective drug candidates.

The clinical tests that follow will be divided between the firms: Yuhan will take charge of tests in Korea and Gilead in other countries. The U.S. firm will also take global commercialization rights for the final product, while Yuhan will do business in Korea.

Signing a commercial deal for a project this early in the research stage is unusual in the pharmaceutical industry, which sees new drug projects frequently fail even during clinical tests, according to a Yuhan spokesman.

According to the agreement, Yuhan will receive an upfront payment of $15 million and will receive up to $770 million in milestone payments, given over the course of development and revenue achievements.

Yuhan and Gilead were already partners, with the local company offering support in promoting Gilead’s product in Korea.

“This collaboration builds on our long-term partnership with Yuhan, with a new focus on the investigation of novel approaches to treat patients with advanced fibrosis due to NASH that complements our ongoing research program,” said John McHutchison, chief scientific officer and head of research and development at Gilead Sciences.

BY SONG KYOUNG-SON [song.kyoungson@joongang.co.kr]