Eli Lilly will join in developing and commercializing Hanmi Pharmaceutical's Phase I compound HM71224 for autoimmune and other diseases, in a deal that could generate up to $690 million, plus royalties, for Hanmi.

HM71224 is an oral Bruton's tyrosine kinase (BTK) selective inhibitor that is being developed for rheumatoid arthritis (RA), according to Hanmi’s website. In addition to RA, Lilly and Hanmi plan to investigate HM71224 as a potential treatment for lupus, lupus nephritis, Sjögren's syndrome, and other related conditions, Lilly said.

Last year during the European League Against Rheumatism (EULAR) 2014 conference in Paris, Hanmi presented interim clinical data results from an ongoing Phase I study of 58 volunteers in Netherlands. According to the presentation, absorption in the body of HM71224 proportional to increasing dose was observed in healthy volunteers from both single dose and multiple doses. The results were not affected by food intake, Hanmi added.

“We're highly encouraged by the potential of HM71224 to deliver an innovative, first-in-class treatment option,” Thomas Bumol, Ph.D., svp, biotechnology and immunology research at Lilly, said in a statement.

Added Gwan Sun Lee, Ph.D., Hanmi’s president and CEO in a separate company statement: “I believe our partnership with Eli Lilly will increase the chances of a scientific breakthrough to cure various autoimmune diseases.”

Under their agreement, Lilly will receive worldwide rights to the molecule for all indications excluding China, Hong Kong, Taiwan, and Korea. Lilly will also retain development, regulatory, manufacturing, and commercial leadership for the molecule in territories where Lilly operates.

In return, Lilly said, it agreed to pay Hanmi $50 million upfront, and up to $640 million in payments tied to achieving development, regulatory, and sales milestones. If HM71224 is successfully commercialized, Hanmi will also be eligible for tiered double-digit royalty payments, Lilly added.

The agreement is subject to clearance under the Hart-Scott-Rodino Antitrust Improvements Act, similar requirements outside the U.S., and other customary closing conditions.

Investors welcomed news of the collaboration with Lilly, sending shares of Hanmi traded on the Korea Stock Exchange soaring 14.84% or KRW 27,000 ($24.07) per share to about KRW $209,000 ($186.28) per share, the Korea Times reported.

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