Swedish biotech Vicore Pharma has entered an exclusive licensing agreement for the Japanese rights for its idiopathic pulmonary fibrosis (IPF) therapy C21 with Nippon Shinyaku.

Vicore will receive a $10m upfront payment and will be in line to receive up to $275m in development and commercial milestone-based payments. The company will also be placed to get tiered royalties that extend into “the low 20s” based on annual net sales of C21 in Japan, as per a 9 February press release.

As per the agreement, Nippon will hold exclusive rights to develop and commercialise C21 in Japan. The company will be responsible for operational and financial costs for developing C21 in the country.

Nippon will also contribute financially to the Japanese trial sites and patients in the global late-stage development of C21.

Following the news, Vicore’s stock was up over 18% in trading today. The company’s market cap stands at Skr1.7bn ($162m).

C21 is an angiotensin II type 2 receptor agonist (ATRAG) that activates the protective arm of the renin-angiotensin system (RAS). It has been granted orphan drug designation by both the US Food and Drug Administration and the European Medicines Agency for the treatment of IPF.

The therapy is being evaluated in the Phase IIa AIR trial (NCT04533022). Although the study was disrupted due to the Russia-Ukraine war, it managed to enrol 60 participants. In May 2023, 19 participants completed 36 weeks of treatment, with the therapy demonstrating stabilisation of lung capacity and increased forced expiratory volume at six weeks. Vicore plans to start a global, double-blind, placebo-controlled, 52-week Phase IIb ASPIRE trial in H1 2024.

C21 is also being developed as a treatment for multiple indications including recovery from Covid-19, and endothelial dysfunction in type 2 diabetics. The Phase II ATTRACT trial (NCT04880642) evaluated C21 in hospitalised Covid-19 patients with signs of an acute respiratory infection but not needing mechanical ventilation. The results showed that C21 reduced the risk of needing oxygen by 40% at the end of treatment.