Takeda Pharmaceuticals will acquire rights to develop and commercialize Hutchmed’s experimental cancer drug fruquintinib outside of mainland China, Hong Kong and Macau, the firms announced Monday morning

Terms of the deal call for Takeda to make an upfront payment of $400 million to the Hong Kong-based pharma company, with up to $730 million in potential milestone and royalty payments. 

Fruquintinib, which is under review by the Food and Drug Administration, is approved in China for treating refractory colorectal cancer (CRC) under the brand name Elunate. Eli Lilly holds marketing rights in that country.

CRC is one of the most common cancers worldwide, with more than 50,000 annual deaths in the U.S. attributed to the disease.

A Phase 3 clinical trial of fruquintinib, dubbed FRESCO-2, met its primary endpoint of improving overall survival (OS) in patients with metastatic CRC. According to the results, presented at September’s European Society for Medical Oncology Congress, the treatment was associated with a 34% reduction in risk of death and was generally well tolerated. 

Last month, Hutchmed also initiated a rolling NDA submission for the drug, which was granted fast-track status by FDA in 2020. The companies plan to complete the FDA submission in the first half of 2023, to be followed by filings with regulatory bodies in Europe and Japan.

This is Hutchmed’s latest encounter with the FDA after the agency issued a complete response letter in May 2022, citing data concerns with its pancreatic cancer drug surufatinib

“We are pleased to be partnering with a company that shares our mission to improve treatment outcomes for cancer patients and has the scale and expertise in global drug development and commercialization to advance fruquintinib globally outside of China,” Hutchmed CEO Dr. Weiguo Su said in a statement. “We believe that fruquintinib has a very strong future and look forward to working with Takeda to unlock its potential.”

As for Takeda, the deal was announced more than a month after the Japanese pharma giant signed a $4 billion agreement with Nimbus Therapeutics for an inflammatory disease drug. 

“We look forward to utilizing our development and commercial capabilities to expand the potential of this innovative medicine to patients beyond China,” said Teresa Bitetti, president of Takeda’s global oncology business unit, in a statement.