Dong-A ST said it signed a global licensing agreement with NeuroBo Pharmaceuticals, a U.S. pharmaceutical company.
Under the accord, Dong-A ST plans to accelerate the global development and commercialization of DA-1241, a type 2 diabetes and nonalcoholic steatohepatitis (NASH) treatment, and DA-1726, an obesity and NASH treatment, as NeuroBo has a geographical advantage of being located in Boston and has access to easy financing as a NASDAQ listed company.
Dong-A ST will transfer the exclusive global development and sales rights for DA-1241 and DA-1726, except for Korea, to NeuroBo.
The Korean company will receive $22 million upfront payment, milestones for each stage, and royalties according to sales, and will be responsible for production of clinical samples and products after commercialization.
NeuroBo will be responsible for the global clinical development, licensing, and sales of DA-1241 and DA-1726.
Notably, Dong-A ST plans to use the $22 million upfront payment to acquire convertible preferred stocks of NeuroBo and plans to acquire additional shares by investing $15 million in NeuroBo.
After completion, Dong-A ST will become the largest shareholder of NeuroBo with a 50.8 percent stake in the company.
However, for this contract to be finalized, NeuroBo will need to raise a total of $30 million, including $15 million invested by Dong-A ST.
NeuroBo plans to raise funds through a general public offering in October.
"The signing of this contract will bring together the R&D capabilities of both companies to accelerate the development of excellent therapeutics," Dong-A ST CEO Kim Min-young said. "We will continue to strengthen our R&D capabilities and do our best to become a global pharmaceutical company through collaboration with global companies."
NeuroBo CEO Gil Price said, "By securing Dong-A ST's excellent pipeline, it is very meaningful that we have entered the NASH, obesity and diabetes fields, which are highly marketable."
NeuroBo will successfully complete the funding and start clinical and research on DA-1241 and DA-1726 as soon as possible, Price added.
The recent agreement comes after a long-standing partnership between Dong-A ST and NeuroBo Pharmaceuticals.
The two companies had first entered a technology transfer agreement in 2018, when Dong-A ST licensed out DA-9801, a natural extract-based diabetic neuropathy treatment, to NeuroBo.
During that time, Dong-A ST received $2 million and a 5 percent stake in NeuroBo.
In March 2021, Dong-A ST said it had signed a contract with E& Investment, a Korean venture capital with a 33 percent stake in NeuroBo Pharmaceuticals, to receive the latter's voting right for the U.S. company.