HONG KONG – South Korean biotech Genexine Inc. licensed out three of its compounds for $100 million to a Chinese drug developer, exploring the Asian market for next-generation long-acting growth hormone treatments.

Clinical-stage Genexine (KOSDAQ:095700) signed a licensing and technology transfer agreement with China's Tasgen, a subsidiary of Tasly Pharmaceutical Group Co. Ltd. (SH:600535). Under the deal reached this week, Genexine will grant the China rights for three compounds, GX-H9, GX-G6 and GX-G3, to Tasgen in exchange for $20 million up front and up to $80 million in milestones.

Lead asset GX-H9 is targeted for the treatment of adult and pediatric growth hormone deficiency (AGHD and PGHD). Genexine said the market size for AGHD and PGHD is currently $4 billion globally and is expected grow to $5 billion by 2018 for current daily human growth hormone products.

"Once we develop weekly to potentially semi-monthly [dosing], we believe the market size will grow even further," Michael Keyoung, CEO and president of Genexine, told BioWorld Asia. "In China, we believe market size will further expand with more convenient dosing even if [it has the] same efficacy as daily."

Human growth hormone is a polypeptide hormone produced by the pituitary gland located in the lower part of the brain that promotes growth and development of the human body. It is mainly responsible for increasing height. Growth hormone deficiency can lead to dwarfism, delay in sexual maturity or growth delay. AGHD patients face not only mental illness but also physical threats such as reduction in muscle mass, increase in body fat, cholesterol level, higher cardiovascular disease rates and lower bone density.

GX-H9, currently co-developed with another Korean company, Handok Pharmaceuticals Co. Ltd., has been selected by the Korea Drug Development Fund program. Genexine is conducting a phase II trial in Europe and Korea, but the company plans to enter a global phase III trial in all major territories, including the U.S., by 2017 or 2018.

The second product, GX-G6, is a long-acting glucagon-like peptide-1, or GLP-1, therapeutic for diabetes, and it is expected to enter phase I testing with funding from South Korea's Ministry of Health and Welfare.

GX-G3, which targets neutropenia, is undergoing phase I trials.

In addition to the China rights to the three compounds, Tasgen also acquired global rights of two other Genexine preclinical compounds: GX-P2 and GX-G8.

Korea's Ministry of Trade, Industry and Energy is funding the early stage development of GX-P2, a long-acting PD-L1 drug for the treatment of inflammatory bowel diseases. And the Ministry of Science, ICT and Future Planning is funding the animal studies of GX-G8, a long-acting GLP-2 drug for the treatment of chemotherapy-induced diarrhea and short bowel syndrome.

"We out-licensed these novel preclinical biologic assets for limited specific indications, and the financial terms to these were not disclosed," said Keyoung.

Tasgen will co-develop GX-P2 and GX-G8 with Genexine. Tasgen is keeping the options for the clinical trial site open, and the two parties will choose a place that best suits the indication.

"With the pipeline, Tasgen will strive to become one of the best biopharmaceutical companies in China," said Kaijing Yan, CEO of Tasly and Tasgen.

According to a stock notice from Tasgen's parent company Tasly, Genexine has also purchased a third of Tasgen's shares for $10 million.

Tasgen is not the first Chinese partner for Genexine – the company out-licensed its therapeutic vaccine for human papillomavirus to Simcere Pharmaceutical Group last year.

"We do plan to out-license additional assets to China as we believe China is an important market," said Genexine's Keyoung. "As for other regions, we plan to enter by ourselves but also in partnerships that makes sense."

Genexine announced a partnership with leading Indonesia-listed company Kalbe Farma last week for another phase II-ready asset.

"There truly is innovation coming out of South Korea for sure," Keyoung added.

Founded in 1999, Genexine is the country's leading developer of long-acting growth hormone. A few companies have tried to develop similar drugs in Asia but failed for either efficacy or lack of marketability. Genexine, however, does have some competitors in the U.S. and Europe.

"We believe we are globally competitive as we can potentially be the best and first in class and we look forward to sharing our data such that we can be a leading long-acting human growth hormone company for patients worldwide," Keyoung said.