(Yicai) Jan. 21 -- KeyMed Biosciences and InnoCare Pharma have granted RTW Investments-backed Prolium Bioscience exclusive global rights to a novel antibody-drug conjugate still in clinical trials, with the deal potentially worth more than USD520 million.

A 50/50 project firm under KeyMed and InnoCare recently inked the deal for ICP-B02 with Prolium Bio, the Chinese pair announced separately late yesterday. The agreement covers the drug's development, registration, manufacturing, and commercialization rights for non-oncological use worldwide and oncological use outside Asia, they said.

Under the deal, Prolium Bio will make an upfront payment of USD17.5 million, followed by development milestone payments of up to USD502.5 million, with KeyMed and InnoCare to acquire minority stakes in the Delaware-based company, the two Chinese firms noted.

In addition, Prolium Bio will also pay royalties on annual net sales once the drug enters commercial production, KeyMed and InnoCare pointed out, without disclosing further details.

ICP-B02 is a bispecific antibody in Phase I and II clinical trials for treating relapsed and refractory non-Hodgkin lymphoma in China. Initial results have been promising, with Chinese regulators approving clinical trials combining the drug with other immunochemotherapy treatments.

Prolium Bio was established by New York-based RTW, an investment firm focused on discovering transformative and breakthrough innovations in biopharmaceuticals and medical technologies, last August.

The licensing deal is a typical NewCo business model transaction in the pharmaceutical sector, where Chinese drug makers grant global rights to products under development to newly set up international investment-led companies. Beyond upfront payments, milestone payments, sales commissions, and other standard returns, the agreements often include partial equity stakes in the new enterprise.

Since July, KeyMed has inked four NewCo model agreements with overseas investment funds. The latest was also its second this year after granting a project firm set up by Bain Capital and Venrock Healthcare Capital Partners exclusive global development rights to a systemic lupus erythematosus drug earlier this month.

Shares of KeyMed [HKG: 02162] rose 3.18 percent to HKD30.85 (USD3.96) each as of 3.25 p.m. in Hong Kong today. InnoCare's stock [SHA: 688428] closed down 0.74 percent to CNY12.05 (USD1.66) in Shanghai.

Editor: Martin Kadiev