Oscotec said it signed a technology transfer agreement with Kanaph Therapeutics to acquire the exclusive global license for the latter's KNP-502, an EP2/4 dual inhibitor for treating cancer.

Under the accord, Kanaph will receive a down payment of 2 billion won ($1.6 million), various milestones and royalties, or distribution of profits if Oscotec further licenses out the drug to a multinational pharmaceutical company.

The two companies aim to enter clinical trials in 2023 after conducting preclinical development through joint research for the next year.

According to Oscotec, EP2/4, targeted by KNP-502, is a Prostaglandin E2 (PGE2) receptor secreted by cancer cells into the tumor microenvironment during malignancy.

While several companies, including BMS, are conducting clinical trials for a selective EP4 antagonist, Tempest Therapeutics, a U.S. pharmaceutical firm, is the only other company researching an EP2/4 dual inhibitor.

Tempest is currently conducting a phase 1 clinical trial for its candidate.

"KNP-502 showed excellent immunotherapy effects alone through multiple animal model experiments and demonstrated synergistic effects with the PD-1 antibodies," Oscotec CEO Yoon Tae-young said. "The company also confirmed that it is a candidate material with sufficient development potential in safety and pharmacokinetics according to high selectivity."

Kanaph CEO Lee Byung-chul also said, "We have evaluated KNP-502 as a material with the best-in-class potential to overcome the low response rate of immunotherapies as combination therapy with existing immunotherapies."

Considering Oscotec's clinical development know-how, the company expects that the licensing agreement will provide innovative new drugs to patients, Lee added.