Chong Kun Dang partners with Novartis in historic $1.3 billion deal

Chong Kun Dang's headquarters in Seodaemun District, western Seoul [CHONG KUN DANG]

Pharmaceutical company Chong Kun Dang signed a $1.3-billion technology transfer agreement with Novartis for its rare genetic disease treatment candidate.

The technology transfer deal, signed on Monday, is the largest ever for the Korean pharmaceutical company.

Chong Kun Dang’s CKD-510, a histone deacetylase 6 (HDAC6) inhibitor, is a drug candidate for Charcot-Marie-Tooth disease, which is a rare, hereditary genetic condition that causes muscle weakness. HDAC6 is an enzyme involved with inflammatory responses, and inhibiting it can dampen those responses.

In signing the deal, Chong Kun Dang licensed out the exclusive rights to research, clinical studies and sales of CKD-510 outside Korea to Novartis, a big pharma company based in Basel, Switzerland, according to the company’s regulatory filing Monday. It retains the rights to CKD-510's development and sales in the domestic market.

While the technology transfer contract is valued at $1.3 billion, Novartis agreed to an upfront payment of $80 million upon the signing of the deal, and will later pay $1.2 billion each time certain drug-development milestones, or objectives, are attained.

Licensing royalties will be paid separately based on the drug’s sales performance in the future.

Chong Kun Dang completed CKD-510's phase one clinical trial of in Europe and reported positive results during preclinical studies.

“Chong Kun Dang has previously exported our anemia treatment biosimilar Nesbell to Japan and a novel diabetes treatment Duvie to the United States through technology transfer,” said the company’s CEO Kim Young-joo.

“The latest deal is our biggest ever, and it feels rewarding to license out one of our new drug candidates, that we have been investing over 12 percent of our revenue every year to develop, to a global big pharma company,” said Kim.

Following the regulatory filing Monday, Chong Kun Dang's share price soared by 26.11 percent on the main Kospi bourse to close at 128,000 won ($98.80).

BY SHIN HA-NEE [shin.hanee@joongang.co.kr]