Dainippon Sumitomo Pharma Co, Ltd. (DSP) and Intercept Pharmaceuticals have entered into an exclusive licensing agreement for the development and commercialization of Intercept’s first-in-class FXR agonist obeticholic acid (OCA, also known as INT-747). DSP will advance OCA in Japan and China for the treatment of chronic liver diseases, with an initial focus on primary biliary cirrhosis (PBC) and nonalcoholic steatohepatitis (NASH). Intercept is currently preparing for the initiation of a Phase III PBC program in the U.S. and Europe and, under the company’s cooperative research and development agreement (CRADA) with the National Institute of Diabetes and Digestive and Kidney Diseases (NIDDK), a large placebo-controlled trial of OCA in NASH patients recently started enrolling in the U.S.

Intercept will receive an initial payment from DSP of $15 million and will be eligible to receive approximately $300 million in additional milestone payments associated with the successful development and commercialization of OCA. Upon launch of OCA, Intercept will be entitled to receive tiered double-digit royalties from DSP based on sales in its territory. DSP has the exclusive option to add several other Asian countries to its territory, including Korea and Taiwan, and to pursue additional indications. DSP will be responsible for the costs of developing and commercializing OCA in its territory.

“OCA is an important strategic addition to our growing pipeline of hepatology drugs and reflects DSP’s strong commitment to specialty therapeutic areas,” said Masayo Tada, president and chief executive officer of DSP. “There is a very high unmet medical need in the hepatology area in Asia and DSP’s marketed products Sumiferon, a natural alpha interferon, and Miripla, a therapeutic agent for hepatocellular carcinoma, benefit many thousands of liver patients in Japan. We strongly believe that OCA has the potential to significantly add to the treatment options DSP can make available to these patients and are looking forward to working with Intercept to bring OCA to the market as an important new therapy for PBC and the first drug approved for NASH.”