Cancels contract with American partner for delayed clinical tests

Ahngook Pharm’s attempt to enter the U.S. and European markets with an independently developed drug to treat coughing and phlegm has ended up in failure, the company said Thursday.

The Korean pharmaceutical company canceled a license contract with Gravity Bio for its Synatura Syrup on Tuesday, holding its U.S. partner responsible for failing to carry out local development and clinical experiments of the drug. The company said it would seek a new licensing partner

Synatura Syrup

Ahngook made the $43.5-million contract for Synatura Syrup, including milestones – financial payments for a company developing a drug candidate after it achieves defined goals or milestones in Phase 2 or Phase 3 trials – in June 2013. Gravity Bio specializes in developing and marketing and has promised to develop products and conduct clinical trials to get approval from the U.S. and Europe in two years after the contract. But it had made little progress, delaying clinical trials, until recently, forcing Ahngook Pharm to inform its decision to nullify the contract.

Under the contract, the U.S. company was to receive $6 million as licensing costs ($4 million for U.S. FDA’s approval and the other $2 million for European Medicines Agency’s approval), plus a maximum of $37.5 million depending on sales volume.

The cancellation has come to delay Ahngook’s advance to these markets until it finds a new partner. But the company would take its time to select one, as it has just set its eyes abroad and its patent will remain valid until 2029.

Instead, it is speeding up to move to the Middle East and Africa. The company started its overseas expansion by selling products to in Iran last year and has asked 10 countries, including Kuwait and South Africa, for marketing licenses there. It plans to start to sell drugs in these regions, starting with Kuwait this year.

Another overseas target of Ahngook is Latin America. It signed a license contract with Italian drugmaker Menarini last year to advance to seven Central American countries. It also plans to enter into the Colombian market through an agreement with BCN Medical before expanding its advance to Brazil, the largest Latin American market.

“In the Middle East and Latin America, we have completed the release of products or are waiting for permissions, and we will push ahead with advancing to the U.S. market,” a company official said. “Our beachhead in Southeast Asia is Vietnam where we expect to win product approvals in the first half of this year and began to sell them in the latter half.”

Ahngook began to market Synatura Syrup in 2011 and recorded sales of 32.6billion won ($28million) last year, according to UBIST, a market research agency.

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