(Yicai) Dec. 30 -- Hengrui Pharmaceuticals has granted Ideaya Biosciences exclusive global rights to an antibody-drug conjugate that targets delta-like ligand 3, a protein that regulates the development, spread, and proliferation of neuroendocrine tumors such as small cell lung cancer. The deal could be worth more than USD1 billion.

The agreement covers SHR-4849, the Lianyungang-based company announced yesterday. Hengrui and Ideaya, a US clinical-stage oncology firm, will also set up a joint management committee to coordinate the drug’s worldwide development and commercialization.

Under the deal, Ideaya will make an upfront payment of USD75 million, followed by development milestone payments of as much as USD200 million and sales milestone payments of up to USD770 million. It will also pay single-to-double-digit percentage royalties on annual net sales.

China’s National Medical Products Administration approved SHR-4849 for clinical trials for the treatment of advanced malignant solid tumors in June. No DLL3-targeting ADC treatments have been approved globally, with several in clinical trials.

ADC drugs have become an area of focus in the pharmaceutical sector in recent years, with the global market likely to exceed USD40 billion by 2026, according to Citic Securities.

Hengrui’s shares [SHA: 600276] ended little changed at CNY46.14 (USD6.32) apiece in Shanghai today. The stock has added 3.8 percent since the end of last year.

Established in 2015, California-based Ideaya had USD1.2 billion worth of assets as of Sept. 30, with USD59 million of liabilities and USD1.2 billion of shareholders' equity. It reported a net loss of USD113 million last year on revenue of USD23 million.

Editor: Martin Kadiev