BRIEF—China's Kelun Pharma out-licenses cancer drug to Merck

China-based Kelun Pharmaceutical saw its shares jump as much as 6.7% after it revealed it has granted overseas development rights of an investigational cancer drug to a unit of US pharma giant Merck & Co that could potentially earn it over $1.4 billion, according to media reports.

Kelun Pharma will receive a non-refundable upfront payment of $47 million on signing the contract, as well as milestone payments of a maximum of $1.3 billion at different stages of the project. Once the treatment is launched, Kelun Pharma will receive a sales commission according to an agreed ratio.

The cooperation with Merck will help speed up Kelun Pharma’s entry into global markets and enhance the internationalization of its projects, it said. No mention was made of the drug’s development to date.

In March this year, Kelun Pharma granted an exclusive license to UK drug developer Ellipses Pharma to develop another experimental cancer drug in overseas markets, including Europe and the USA.