Yuhan Corp., South Korea’s top pharmaceutical company by sales, has signed a 1.41 trillion won ($1.17 billion) deal with GI Innovation Inc., a Korean biotech startup, for joint development and commercialization of an investigational long-acting biologic for the treatment of allergic diseases like chronic urticaria, atopic dermatitis and food allergy.

Under the contract, Yuhan will pay GI Innovation an upfront payment of 20 billion won, plus 89 billion won in milestone payment and 1.3 trillion won in royalties depending on future sales, the company said on Thursday.

Shares of Yuhan closed Thursday 0.38 percent higher at 52,200 won in Seoul.

The agreement will allow Yuhan to have rights to develop and commercialize the drug codenamed GI-301 against allergic diseases in the global market except for Japan.

GI-301 is a fusion protein that binds circulating Immunoglobulin E (IgE) antibodies in the bloodstream to prevent them from combining with mast cells or basophil and creating histamine, which causes allergic reactions.

According to preclinical data, the new drug is about 50 times stronger in efficacy compared to Xolair (omalizumab), the only monoclonal anti-IgE antibody approved by the U.S. Food and Drug Administration used to treat moderate to severe persistent allergic asthma in patients 6 years of age or older whose asthma symptoms are not controlled by inhaled corticosteroids.

Xolair, the injectable prescription med developed by Switzerland-based global healthcare company Novartis, generates 4 trillion won in revenue every year.

GI-301 will be a useful treatment option to patients with allergic diseases who have difficulty in treatment with Xolair, Yuhan said.

By Seo Jin-woo and Lee Ha-yeon

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