Chong Kun Dang Pharmaceutical (CKD Pharm), a Korean drugmaker, said it has signed a $1.3 billion deal with global pharmaceutical giant Novartis to license out a new drug candidate, CKD-510. 

On the news of the deal, CKD Pharm’s stock price rose nearly 20 percent on Monday.

CKD Pharm said Monday in a public filing that it has signed a technology export contract worth $1.305 billion (about 1.73 trillion won) with Novartis Pharma AG, a global pharma based in Switzerland, for its new drug candidate, CKD-510.

Under the agreement, Novartis will have global exclusive rights to develop and commercialize CKD-510, a small molecule histone deacetylase 6 (HDAC6) inhibitor developed by CKD Pharm worldwide, excluding Korea. The termination date will be the royalty expiration date from the date of signing the contract and be based on the later of 10 years after the first release, the patent expiration date, or the expiration of the licensee's exclusive rights.

CKD Pharm will receive a non-refundable upfront payment of $80 million, milestone payments of up to $1.225 billion for future development and approval milestones, and sales royalties based on sales. It will also receive an ongoing technology fee based on net sales.

CKD-510 is a drug candidate with a platform technology that selectively inhibits HDAC6. CKD Pharm has completed a European phase 1 clinical trial of CKD-510 for treating Charcot-Marie-Tooth (CMT), a rare disease caused by a genetic abnormality.

In animal models of induced atrial fibrillation, CKD-510 increased acetylated α-tubulin, decreased calcium-activated protease calpain activity, improved action potential duration (APD90), and decreased atrial fibrillation inductivity and persistence.

"The indication has not been specified yet. Efficacy for various diseases has been confirmed through many clinical and non-clinical studies, and indications will be confirmed through partners in the development process," a CKD Pharm official said.

Besides, CKD Pharm is speeding up the development of CKD-702, a dual antibody anticancer biologic, and CKD-508, a treatment for dyslipidemia, currently in phase 1. Its strategy is to focus on developing new drugs and unmet needs by expanding the scope of new drug development to include gene therapy drugs and antibody-drug conjugate (ADC) anticancer drugs, which are advanced biopharmaceuticals.

"CKD Pharm previously exported anemia treatment biosimilar Nesbell and diabetes treatment drug Duvie to Japan and the U.S., respectively," CKD Pharm CEO d Kim Young-joo said. "This is the largest contract ever, and we are grateful to our researchers for the opportunity to export one of our innovative drug candidates to a multinational company, which we have developed by consistently investing more than 12 percent of our annual sales in R&D."

Lee Mi-yeop, head of CKD Pharm’s Product Development Headquarters, said, "We expect Novartis to develop CKD-510 into a global drug based on its long-standing drug development know-how and commercialization capabilities."

CKD will use this agreement as an impetus to accelerate the clinical trials of our core drug candidates and continue to make progress as soon as possible, Lee added.

At 12:30 p.m. Monday, CKD’s stock price rose 23.45 percent, or 25,900 won, to 121,200 won from the previous day's closing price.