Korea’s Kolon Life Science has signed a 230 billion won ($200 million) contract to export its osteoarthritis drug Invossa-K to China Life Medical Centre and Hainan Province, the company said in a regulatory filing on Wednesday.

The actual delivery is subject to marketing approval from local health authorities. The term of the contract is five years after approval completion. Kolon Life Science revenue can be realized from 2019 when the regulatory procedure is expected to be completed.

Kolon Life Science shares gained 7.54 percent to close at 77,000 won on Wednesday.

Upon marketing authorization, China Life Medical Centre will hold marketing exclusivity for the drug in Hainan Province.

Kolon Life Science stipulated in the contract a minimum purchase quantity per year in order to stabilize future revenue.

A penalty can be awarded to the Chinese partner if the minimum order quantity is not met from the third year of the contract. The minimum contract value is about 172.7 billion won based on the penalty condition with 230 billion won in total for five-year exports.

“We aim to promote the efficacy of Invossa in Hainan Province and then take an opportunity to launch Invossa in mainland China based on clinical experience and data from Chinese patients,” said a Kolon Life official.

Invossa-K is the world’s first gene therapy treatment for osteoarthritis, which was approved by Korea’s health authorities in July of last year.

By Shin Chan-ok and Minu Kim

[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]