[Edaily Reporter NA EUN-KYUNG ] D&D Pharmatech Inc.(347850)is acquiring the intellectual property rights and exclusive development and commercialization rights for three new drug candidates held by its U.S. subsidiary, Neuraly. The company plans to bring back to the parent company the rights previously granted to the subsidiary for clinical development in the U.S., thereby unifying the decision-making structure for new drug development and technology export operations.

D&D Pharmatech Inc. announced on the 2nd that it had signed an agreement with Neuraly, its wholly-owned U.S.-based subsidiary, to acquire patents and intellectual property rights for its key pipeline. The contract is valued at $3,311,458 (approximately 4.4 billion won), and there is no obligation to pay separate ongoing royalties.

The agreement covers three products: “TLY012,” a treatment for fibrotic diseases; “NLY01,” a treatment for degenerative brain diseases; and “NLY12,” a long-acting treatment for obesity and diabetes.

D&D Pharmatech Inc. established Neuraly in 2016 to conduct clinical development in the U.S. Subsequently, in May 2018, it granted its U.S. subsidiary the global exclusive rights to develop and commercialize NLY01, and in July of the same year, it granted the same rights for TLY012. At the time, this decision was made to efficiently advance clinical development and the regulatory approval process in the U.S.

TLY012 is a therapeutic agent that induces the death of activated myofibroblasts, which are considered a cause of fibrotic diseases. Unlike existing fibrotic treatments that focus on suppressing inflammation or the progression of fibrosis, it is designed to directly eliminate cells involved in fibrosis by activating the cell death receptor DR5.

It has received Orphan Drug Designation from the U.S. Food and Drug Administration (FDA) for chronic pancreatitis and systemic sclerosis, and in 2021, the company received approval for an Investigational New Drug (IND) application for a Phase 1 clinical trial targeting chronic pancreatitis. Recently, the company has been pursuing the process to change the development indication to liver fibrosis. The company aims to begin clinical trials early next year.

NLY01 is a glucagon-like peptide-1 (GLP-1) receptor agonist that works by inhibiting the excessive activation of microglia—immune cells in the brain—to reduce neuroinflammation. It is notable for applying GLP-1-class drugs, typically used for weight loss or blood glucose control, to the treatment of degenerative brain diseases.

However, in a Phase 2 clinical trial for Parkinson’s disease announced in 2023, the drug failed to meet the primary efficacy endpoint in the overall patient population. Since then, the company has been exploring development opportunities for other neuroinflammatory conditions and is also pursuing an investigator-initiated clinical trial with Johns Hopkins University School of Medicine in the U.S.

NLY12 is a GLP-1 receptor agonist that utilizes PEGylation technology to extend the duration of action. It is being developed as a long-acting subcutaneous injection with a dosing interval of 2 weeks to 1 month, which is longer than that of existing once-weekly obesity treatments. The company is currently preparing to enter clinical trials.

With this transfer of rights, D&D Pharmatech Inc. has consolidated the commercialization rights for its existing in-house pipeline—including “Zabopegduotide (DD01),” a treatment for metabolic-associated steatohepatitis (MASH)—and Neuraly’s key pipeline assets under the umbrella of its parent company.

Going forward, D&D Pharmatech Inc. will directly serve as the contracting party for U.S. clinical trials and global technology export agreements related to these pipelines, and the parent company will recognize related revenues, including upfront payments, milestone payments, and royalties.

The company explained that since this agreement constitutes an internal transaction between the parent company and its wholly-owned subsidiary, no funds will flow outside the group. Neuraly plans to use the proceeds from the transfer as working capital and will continue to oversee local clinical research and development operations in the U.S.

Lee Seul-gi, CEO of D&D Pharmatech Inc., stated, “This agreement is a strategic decision aimed at consolidating the commercial value of our key pipeline around our listed parent company and aligning the rights holder with the entity driving the business.” She added, “Based on a unified decision-making structure, we will lead discussions on technology transfers and strategic partnerships with global partners more swiftly and proactively.”