April Bio said Tuesday that it had signed a technology license and joint research and development contract with Yuhan Corp. to develop a new drug candidate.

Under the accord, the two companies will conduct joint research to develop a new treatment candidate for a dual- and long-acting fusion protein substance applicable to intractable solid cancer based on April Bio's serum albumin fragment associated (SAFA) platform technology and Yuhan's new drug R&D capabilities.

April Bio will receive contracted technology fees from Yuhan when they achieve certain milestones, including a down payment. In addition, if approved, April Bio can also receive its share of annual net sales as a recurring technology fee.

If Yuhan enters into a license agreement with a third party, a certain percentage of the proceeds may also be distributed.

However, the two companies did not disclose the investment amount, citing contractual reasons.

"By combining our SAFA platform and dual-action anticancer drug development technology with Yuhan's immunotherapy development know-how, we plan to develop a substance that can safely and effectively remove cancer cells," April Bio CEO Cha Sang-hoon said. "Our company will focus on research to provide new treatment options to patients suffering from various intractable solid cancers."

Yuhan CEO Cho Wook-je said, "Through this joint research, we anticipate a synergistic effect of the technologies of the two companies and will derive innovative drug candidates from diseases that have unmet needs."

Cho added that the company would continue to promote active open innovation for new drug development.

April Bio entered the KOSDAQ stock market in July after passing the preliminary examination in May. Yuhan participated in April Bio as a strategic investor (SI) to hold a 10.25 percent stake, making it the second largest shareholder.