Why royalties for Yuhan’s Leclaza were reduced $300mil

Terminates research for a 4th generation anticancer drug with Janssen…reducing the total amount of milestone payments payable

Signed a USD 1.255 billion deal in 2018...The next-generation therapy study FDA approval ended the next-generation study

Received USD 210 million in technology fees...may receive additional technology fees up to USD 740 million

The maximum contract amount for Leclaza, which was licensed out to Janssen by Yuhan Corp, has been reduced by USD 350 million.

 

This reduction was due to the termination of research to develop Leclaza as a next-generation anti-cancer drug.

 

Yuhan Corp received USD 210 million as upfront payment and development and approval milestones for the licensing agreement and is eligible to receive up to USD 740 million upon further development and sales.

 

Pic of Yuhan Corp headquarters

On the 20th, Yuhan Corp publicly announced that the maximum deal for Leclaza’s technology transfer agreement with Janssen Biotech has been reduced by USD 350 million (KRW 406.5 billion) from USD 1.255 billion to USD 950 million.

 

The company explained that the reduction was due to “partial corrections to the agreement due to the termination of collaborative research and development of next-generation (4th generation) EGFR (epidermal growth factor receptor) targeted anticancer therapy.” In November 2018, Yuhan Corp licensed out its anti-cancer drug Leclaza to Janssen Biotech.

 

The total value of the agreement, including a non-refundable upfront payment of USD 50 million, amounted to USD 1.25 billion.

 

The term of the agreement is from the date of the agreement until the expiration of the country-specific patent rights or 12 years from the date of the first commercial sale in each country, whichever comes later.

 

The technology transfer agreement also included rights to develop a fourth-generation EGFR tyrosine kinase inhibitor (TKI).

 

Third-generation EGFR TKIs were primarily developed for the treatment of NSCLC with EGFR gene mutations, most notably the T790M mutation.

 

The T790M mutation occurs in patients who show resistance to existing first- and second-generation EGFR TKIs.

 

According to the company, 4th generation EGFR TKIs target a broader genetic mutation profile than existing EGFR TKIs as they selectively inhibit key mutations that lead to resistance to 1st to 3rd generation EGFR TKIs.

 

Janssen had studied the combination of the 3rd generation EGFR-targeted cancer drug Leclaza and Johnson & Johnson's bispecific antibody amivantamab.

 

Janssen successfully completed the clinical trial for Leclaza in combination with amivantamab and received U.S.

 

Food and Drug Administration (FDA) approval last month for the combination of Leclaza and Rybrevant as a first-line treatment for adult patients with locally advanced or metastatic NSCLC who have a confirmed EGFR exon 19 deletion or exon 21 L858R substitution mutation.

 

“The significant reduction in the incidence of secondary resistant EGFR mutations in patients treated with the Leclaza and amivantamab combination reduces the need for further development of a 4th generation EGFR TKI,” the company said.

 

In other words, the company explained the combination of Leclaza and amivantamab has been so effective that it has ended attempts to develop a next-generation drug.

 

Yuhan has received a total of USD 210 million from Janssen since licensing out Leclaza.

 

In November 2018, Yuhan received a USD 50 million upfront payment for the transfer of Leclaza’s technology.

 

In April 2020, Yuhan received a USD 35 million milestone payment from Janssen.

 

At the time, Johnson & Johnson paid Yuhan the additional milestone payment for initiating a clinical trial for the Rybrevant and Leclaza combination.

 

In November 2020, Johnson & Johnson paid an additional USD 65 million milestone to Yuhan Corp when it started subject recruitment for the trial.

 

Yuhan Corp will also receive an additional USD 60 million in technology fees for the FDA’s approval of Leclaza.

 

Of the total license fee revenue, 40% is paid to the original developer, Oscotec.

 

In 2016, the company acquired the rights to develop the preclinical drug Leclaza from Oscotec and its subsidiary Genosco.

 

The total value of the agreement had been KRW 1.5 billion.

 

Of the amount, KRW 1 billion was set to be paid within 30 days of the signing of the agreement and KRW 500 million was to be paid after the approval of Phase I clinical trials.

 

Additional milestone payments of up to USD 740 million (KRW 984.2 billion) still remain as future development and sales milestones for Leclaza.

 

Yuhan Corp is also currently independently conducting a global Phase III clinical trial for Leclaza.

 

Janssen did not participate in the trial.