HONG KONG – South Korea's oldest pharmaceutical company, Yuhan Co. Ltd., has out-licensed its lung cancer drug candidate, lazertinib, to Janssen Pharmaceutica NV in a deal that could involve up to $1.25 billion.

Under the agreement, Janssen paid the Korean firm $50 million up front for the license. Another $1.2 billion could come after unlocking significant milestones and securing marketing approval.

Yuhan is also eligible for tiered double-digit royalties after commercialization.

With the exclusive rights to the drug, Janssen will be developing, manufacturing and commercializing lazertinib worldwide, except South Korea, where Yuhan retains the commercial rights. Both companies will work together on clinical trials evaluating lazertinib both as a monotherapy treatment and as a combination regimen. The trials will begin in 2019.

"We believe, with the partnership with Janssen, that we can rapidly develop lazertinib as a cost-effective monotherapy as well as new standard-of-care combination regimen for the treatment of patients with non-small-cell lung cancer [NSCLC]," Han-joo Kim, director and head of Yuhan's R&D Institute, told BioWorld Asia.

"Lazertinib has shown significant antitumor effect with wide safety margin in [the] clinic. We will push it to enter [a] multinational phase III clinical trial in 2019," he added.

Developed by Yuhan, lazertinib is an oral, mutant-selective and irreversible drug aiming to treat NSCLC with EGFR mutations and the T790M mutation. EGFR mutations are found in around 10 percent to 15 percent of NSCLCs.

It is also a third-generation EGFR tyrosine kinase inhibitor (TKI) that could cross the blood-brain barrier, which means it could suppress primary lung cancers that have spread to the brain. The Korean firm is aiming to position lazertinib as a first-line therapy for treatment of NSCLC, which accounts for about 85 percent of all lung cancers.

The drug currently is in phase I/II testing in South Korea. Interim data from the open-label, multicenter, dose-escalation study showed lazertinib demonstrated disease activity in patients with NSCLC resistant to EGFR-TKIs, with or without brain metastasis. The drug also was found to be well-tolerated, with low rates of grade 3 or higher adverse events. No dose-limiting toxicities were observed up to 320 mg, and there were no dose-dependent increases in treatment-emergent adverse events.

The confirmed overall objective response rate across all dose levels was 61 percent among 110 patients. The rate came to 66 percent in 92 T790M-positive patients, and 55 percent in 11 patients with brain metastasis.

"These data are impressive and underscore the potential of lazertinib to be the best-in-class third-generation EGFR-TKI for patients with advanced EGFR T790M-mutant NSCLC, including brain metastasis," said Byoung-chul Cho, principal investigator of the study.

He added that results showed that lazertinib compares favorably with those from a similar phase I/II trial of osimertinib. Branded Tagrisso, osimertinib, from Astrazeneca plc, gained U.S. FDA approval in April as a first-line treatment for NSCLC patients with EGFR mutations.

"Lazertinib is a promising complement to the Janssen oncology portfolio as we continue to advance the development of targeted therapies for patients with NSCLC," Weng-ho Chow, vice president of Asia Pacific Medical Affairs at Janssen Asia Pacific, told BioWorld Asia.

Yuhan's EGFR-TKI lazertinib fits Janssen's pipeline for lung cancer treatment. The Johnson & Johnson unit is developing an EGFR inhibitor, JNJ-61186372, which is currently in phase I trial for NSCLC. It is a bispecific antibody targeting EGFR and c-Met receptor tyrosine kinase.

The Belgian firm also has another TKI known as JNJ-42756493 (erdafitinib). It is a fibroblast growth factor receptor currently in a phase II study to evaluate its efficacy for Asian patients with NSCLC, urothelial cancer, esophageal cancer or cholangiocarcinoma.

News of the collaboration between the two pharma giants sent Yuhan's share price (KRX:000100) up to KRW250,000 (US$220.35) last week, its second highest closing this year. On Tuesday, the stock closed trading at KRW235,000.

Yuhan, which was founded in 1926 and listed on the Korea Stock Exchange in 1962, has a core business comprising primary and specialty care products, dietary supplements, household and animal care, and contract manufacturing of active pharmaceutical ingredients. But the company recently has been stepping up its game in innovative drugs, with 11 candidates currently in its oncology pipeline, though most are either in discovery or preclinical stage.

Beyond cancer, Yuhan has efforts in cardiovascular and metabolic diseases as well as inflammatory and immune disorders, with 14 drug candidates in total.