China-based Fosun Pharma (SSE:600196, HKEX: 02196) announced on Monday that its subsidiary Fosun Pharma Industrial has signed a licensing agreement with US-based Expedition Therapeutics Inc.

This agreement grants Expedition the rights to develop, manufacture, and commercialise XH-S004, an orally administered dipeptidyl peptidase 1 (DPP-1) inhibitor independently developed by Fosun Pharma, in all regions globally except Chinese Mainland, Hong Kong SAR and Macau SAR.

Fosun Pharma will retain the rights to develop, manufacture, and commercialise XH-S004 in Chinese Mainland, Hong Kong SAR and Macau SAR.

Expedition will pay Fosun Pharma up to USD120m including upfront payment and development milestone payments. In addition, based on the annual net sales of XH-004 in the licensed territories, Expedition will pay up to USD525m in sales milestone payments as stipulated in the contract.

XH-S004 is a small molecule orally administered DPP-1 inhibitor designed to reduce inflammatory responses and block the infection cycle and airway structural damage by inhibiting DPP-1 and the neutrophil serine proteases activated by it. XH-S004 is currently in Phase II clinical trials in China for the treatment of non-cystic fibrosis bronchiectasis and in Phase 1b clinical trials for the treatment of chronic obstructive pulmonary disease (COPD). Currently, no small molecule orally administered inhibitors with the same mechanism of action have been approved for marketing worldwide.