April 25, 2024

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[THE INVESTOR] Shares of JW Pharmaceutical rose over 5 percent on Aug. 27 as the Korean drug maker has signed a license agreement with Denmark-based LEO Pharma for its atopic dermatitis therapy in a deal that could generate revenue of up to US$402 million.

Under the deal announced by JW Pharmaceutical last week, it will grant exclusive worldwide rights, excluding Korea, to develop and commercialize JW1601, a preclinical stage drug candidate, to LEO Pharma. The news sent the share price up nearly 20 percent in early-morning trading and closed 5.12 percent higher at 45,200 won (US$40.56). 

JW Pharmaceutical CEO Jeon Jae-kwang (left) and LEO Pharma Executive Vice President Kim D. Kjoeller

“We find it very positive that LEO Pharma, a global leader in medical dermatology, recognizes the value of JW1601. We have confidence in the successful development and global commercialization of JW1601 and we see LEO Pharma as the right partner for this project,” said JW Pharmaceutical Executive Vice President Lee Kyoung-june.

JW Pharmaceutical will receive US$17 million as upfront fees and stepwise development and sales milestones totaling US$385 million. LEO Pharma will also pay its Korean partner up to two-digit royalty based payments on net sales.

The Korean firm said it plans to submit Investigational New Drug application for phase 1 clinical trials within this year.

According to the it, JW1601 has a dual mechanism of action that blocks the activation and migration of immune cells that cause atopic dermatitis by selectively acting on the histamine H4 receptor and inhibiting the histamine signaling that causes itching.

The global atopic dermatitis treatment market was valued at US$4.57 billion in 2016, and is expected to reach US$7.3 billion by 2024, according to Global Data.

By Park Han-na (hnpark@heraldcorp.com)