Biotechnology company TME Pharma N.V. (Euronext Growth Paris:ALTME) said on Thursday that it has signed a binding exclusive negotiation agreement with Japanese clinical-stage biotechnology company TMS Co Ltd to negotiate a definitive agreement covering worldwide rights to its oncology candidate NOX-A12 (olaptesed pegol).

TMS will pay TME Pharma a non-refundable EUR150,000 fee for a six-month exclusivity period, which may be extended through additional payments.

Under non-binding proposed terms, TME Pharma would receive approximately EUR10m in upfront and near-term payments through a combination of cash and an interest in a newly established subsidiary, alongside more than EUR100m in regulatory and commercial sales milestones. The proposed deal also includes royalties of 8% to 10% on sales projected by TME Pharma to peak at approximately USD1bn, as well as a share of sublicensing fees.

TMS plans to establish a subsidiary to facilitate financing and further clinical development of NOX-A12, with TME Pharma supporting development as a partner and minority shareholder.

The companies aim to finalise a definitive agreement to enable the rapid resumption of the Phase 2 GLORIA study evaluating NOX-A12 for glioblastoma.

NOX-A12 has received Fast Track designation from the US Food and Drug Administration (FDA) and Orphan Drug designations in the United States and Europe. Clinical results from the GLORIA study have been published in Nature Communications.

The proposed financial terms remain subject to further negotiations and the signing of a definitive agreement.