Chugai in-licenses oral COVID-19 candidate

Japanese drugmaker Chugai Pharmaceutical (TYO: 4519) closed down 2.3% at 5,240 yen today, after it said it has concluded a license agreement with its majority owner, Swiss pharma giant Roche (ROG: SIX), for the development and marketing in Japan for AT-527, a new oral drug candidate for COVID-19.

AT-527 was created by Atea Pharmaceuticals (Nasdaq: AVIR) in the USA as a direct-acting antiviral drug to inhibit viral RNA polymerase, an enzyme that is essential for the replication of RNA viruses. It is being investigated as a potential oral treatment for COVID-19. Roche and Atea have partnered to jointly develop AT-527. On signing of the deal, Atea earned an upfront $350 million in cash from Roche with the potential for future milestone payments and royalties.

If approved, Atea will distribute AT-527 in the USA and Roche will be responsible for global manufacturing and distribution outside the USA. Under the license agreement between Roche and Chugai, Chugai obtained exclusive development and marketing rights in Japan for AT-527.