In a noteworthy development, GI Innovation, a company that made its stock market debut in late March, reached a major milestone just seven months after its initial public offering. On October 16th, the company publicly disclosed its agreement with Maruho, a prominent Japanese pharmaceutical firm, for the exclusive rights to develop and market the allergy treatment drug, GI-301, in Japan. The deal is estimated to be valued at approximately $221 million.

The contract, effective from October 16, 2023, extends until the patent expiration date or 12 years following the first sale, whichever is later. The precise details of upfront payments, development stage milestones, commercialization milestones, and running royalties remain confidential in accordance with the terms of the agreement between the two companies.

Under this arrangement, GI Innovation is set to receive non-refundable upfront payments and stage-specific milestones, encompassing clinical development, commercialization, and sales royalties from Maruho. Maruho will assume the primary role in conducting clinical trials and commercializing GI-301 in Japan.

Established in 1915, Maruho boasts a century of experience with a focus on dermatology. The company is engaged in research and development, manufacturing, and sales of products for conditions such as skin dryness, atopic dermatitis, psoriasis, and acne. As of the end of September the previous year, Maruho's consolidated revenue stood at approximately $637 million, with dermatological products accounting for 96% of its total pharmaceutical sales.

During a press conference at the time of their IPO in March, GI Innovation's Chairman Byeong-Geon Lee had announced plans to facilitate the technology transfer for GI-301 in Japan within the year. This recent transfer to Maruho fulfills the commitment made during the company's listing.

GI-301 is an allergy treatment drug, initially transferred to Yuhan Corporation for around $1.0 billion in July 2020, excluding the rights for Japan. Currently, GI-301 is in the midst of phase 1b clinical trials in South Korea.

The company stated, "The decision to transfer GI-301 to Japan was primarily driven by its remarkable therapeutic efficacy when compared to existing blockbuster competitors like Novartis' 'Xolair' and Sanofi's 'Dupixent.'"

Japan, known for its high prevalence of allergy patients, offers substantial markets for allergies, including pollen allergies with a value of $740 million, asthma and chronic obstructive pulmonary disease (COPD) worth $2.22 billion, and atopic dermatitis valued at $296 million. This makes Japan an area of significant interest for global pharmaceutical companies specializing in allergy treatment drugs.

An official from GI Innovation conveyed in a conversation with HitNews, "Maruho will take full responsibility for the clinical trial costs of GI-301 in Japan." They added, "Yuhan Corporation, holding the global rights except for Japan, will promptly facilitate the technology transfer within the coming year, and in such a case, we will equally share the profits. We are dedicated to putting forth our best effort for the remaining phase 1b clinical trials of GI-301."

An anonymous industry insider opined, "A technology transfer deal valued at around $222 million for the Japanese rights appears to be a favorable arrangement." They further commented, "If Maruho successfully reaches milestones following the clinical introduction of GI-301, there is a promising outlook for GI Innovation to generate profits. This technology transfer is viewed positively within the industry."