HK Innoen's 'K-Cab' Technology Export to the US... Upfront Payment of 3 Billion KRW and Up to 640 Billion KRW Deal

HK Innoen 'K-Cab Tablet' (Photo by HK Innoen)

[Asia Economy Reporter Lee Chun-hee] HK inno.N's new drug for gastroesophageal reflux disease, K-CAB (active ingredient 'tegoprazan'), is entering the world's largest pharmaceutical market, the United States.

On the 23rd, HK inno.N announced that it signed a technology transfer and exclusive sales rights contract for K-CAB in the US and Canadian markets with Braintree Laboratories, a subsidiary of Sebela, a US gastrointestinal pharmaceutical specialist company.

Under this contract, HK inno.N will receive an upfront payment of $2.5 million (approximately 2.978 billion KRW) within 30 days. Including milestone payments based on clinical trials, approvals, and sales, the total contract value could reach up to $540 million (approximately 643.2 billion KRW). Since K-CAB is not a drug still in the development stage but a marketed drug expected to achieve 100 billion KRW in outpatient prescription sales this year alone, it is widely anticipated that receiving milestone payments will not be difficult.

The contract period lasts for 15 years after the product launch in the US or until the date of product discontinuation notice, whichever is later. HK inno.N will also receive tiered royalties based on net sales after commercialization. Additionally, HK inno.N is likely to supply the raw materials for K-CAB for the US market.

Including previous technology contracts such as the maximum $95 million (approximately 113.3 billion KRW) technology export deal with China's Shandong Luoxin Pharmaceutical Group in 2015 and the $84 million (approximately 100 billion KRW) finished product export contract with Laboratorios Cranot covering 17 Latin American countries including Mexico in 2019, the total global export scale of K-CAB is expected to reach the trillion KRW level.

Currently, only PPI-class gastroesophageal reflux disease treatments are available in the North American market where K-CAB will enter. However, about 40% of patients in this region suffer from severe heartburn symptoms or serious esophageal mucosal damage that do not respond well to PPI-class products, indicating a strong market demand for new treatments. As the next-generation P-CAB class drugs are expected to address these issues, K-CAB, a drug in this class, is anticipated to establish itself in the US market following its success in Korea.

Seok-hee Kang, CEO of HK inno.N, said, "We are very pleased to export K-CAB technology to the world's largest market, the United States. Starting with China next year, as K-CAB is officially launched in major countries, we hope that the K-CAB seed nurtured well in Korea will take root worldwide."