SHANGHAI – Another month, another announcement for Lee's Pharmaceuticals Ltd., of Hong Kong, as it has been slowly but surely building a successful biotech business and developing and commercializing products for the China market.

This time around it is good news for RGN-259 (thymosin beta 4-based, preservative-free eye drops), which gained CFDA approval to commence phase II trials in patients with moderate to severe dry eye syndrome.

"This is important," Benjamin Li, CEO of Lee's, told BioWorld Today, "because it demonstrates again our commitment to ophthalmology in China and it positions us in an area of highly unmet medical need."

Li talked with BioWorld shortly after landing in San Diego to attend the BIO International Convention.

RGN-259 was licensed from Regenerx Biopharmaceuticals Inc., of Rockville, Md., which has entered the drug into a phase II study in the U.S. Under the terms, Lee's will fund all the development in China and will manufacture and sell the product in the territory.

It's "a typical licensing structure in which there is the usual up-front payment, milestone payment and double-digit royalty," Li said.

RGN-259 is one of several thymosin beta 4-based candidates licensed to Lee's by Regenerx for China, Hong Kong, Macau and Taiwan. When the deal was announced in 2012, it was valued at upward of $3.6 million.

Regenerx licensed the Asian rights (excluding Greater China, which belong to Lee's) to Korean G-treebnt Co. Ltd. (formerly known as Digital Aria Ltd.) in a deal valued at $2.5 million, according to Regenerx's annual report.

Lee's and Regenerx came together thanks to a shareholder they had in common. According to Li, that common denominator was Sigma-Tau Pharmaceuticals Inc., of Gaithersburg, Md., a subsidiary of Pomezia, Italy-based Sigma Tau Group, that provided the initial link-up. When the deal was struck, Sigma-Tau, through its affiliates and subsidiaries, beneficially owned approximately a 38.6 percent equity stake in Regenerx and a 25.9 percent equity stake in Lee's. Mauro Bove was a member both boards.

The two companies are expected to work closely together and have an information-sharing agreement. As the phase II commences in China, there is the potential for the data collected here to contribute to the U.S. trials.

"We're very pleased that the Chinese FDA has accepted Lee's IND for a phase II dry eye study," said J.J. Finkelstein, Regenerx's president and CEO. "Showing strong safety and efficacy results in China will not only be important to future commercialization in that country, but also validate our results in the U.S. and extend the opportunities for this product throughout the world."

It is expected the China trial design will be similar to that of the U.S. study, but as a phase IIb, Lee's study may enroll a greater number of patients. Li noted.

He estimated the market size in Greater China to be $150 million to $200 million given that there is no satisfactory treatment on the market for keratoconjunctivitis sicca, more commonly known as dry eye syndrome. The syndrome affects a great number of people in China and can lead to severe consequences such as cornea damage and ocular inflammation. Lubricants are the current standard of care – known as artificial tear products – and, though Allergan Inc.'s Restasis (0.05 percent cyclosporine solution) recently gained approval in China, it has not become a mainstay treatment option.

Considered a significant unmet need in China, Lee's has been able to get fast track status in dry eye for RGN-259, which is classified as a 1.1 innovative drug under the CFDA regulatory system.

The promise of the drug is that it will treat the underlying pathology of dry eye syndrome with its mechanism of action, establishing a new treatment paradigm.

In the U.S., Regenerx is developing RGN-259, which has been designated an orphan drug, for the treatment of neurotrophic keratopathy, a degenerative disease of the corneal epithelium.

According to both companies, RGN-259 has shown corneal repair and anti-inflammatory properties, making it a new approach to corneal healing. In preclinical studies, cell migration, anti-apoptotic and anti-inflammatory activities of thymosin beta-4 in the cornea were identified.

Besides ophthalmology, Lee's has been growing its pipeline in other areas. So far this year, the firm has announced deals with Transgene SA, of Paris, and Sillajen Co. Ltd., of South Korea, to partner on a liver cancer immunotherapy program and inked a licensing agreement with Dilafor AB, of Stockholm, for a drug candidate in obstetrics. (See BioWorld Asia, Feb. 26, 2014, and April, 2, 2014.)