OliX Pharmaceuticals, a bio company based on ribonucleic acid (RNA) interference technology, recorded the upper price limit following the market close on the 7th in after-hours transactions. This appears to have been stimulated by news of a joint development and licensing agreement for an obesity treatment with Eli Lilly, a U.S.-based company. Eli Lilly is regarded as one of the two major pharmaceutical companies in the obesity treatment market along with Denmark's Novo Nordisk.
OliX Pharmaceuticals shares traded at 22,600 won in after-hours transactions at 4:50 p.m. that day, rising 9.98% (2,050 won) compared to the closing price (20,550 won). The maximum increase in after-hours transactions is 10% compared to the closing price. The share price of OliX Pharmaceuticals jumped 18.17% (3,160 won) during the regular session that day compared to the previous day.
OliX Pharmaceuticals' stock price, which had stayed around 10,000 won, soared to 32,750 won in October last year amid expectations of a large technology transfer (LO) contract. However, it had to experience a sharp decline as rumors spread that the technology transfer had fallen through. OliX Pharmaceuticals indicated it would take legal action against the false information, but the stock price dropped to 13,380 won in January this year.
It appears that investors' concerns have flipped to expectations following OliX Pharmaceuticals revealing the contract details. OliX Pharmaceuticals announced after the market close that it had signed an 'OLX702A joint development and licensing agreement' with Eli Lilly. OLX702A is a therapeutic program that can treat metabolic dysfunction-associated steatotic liver disease (MASH) and obesity simultaneously.
According to this agreement, OliX Pharmaceuticals will complete the phase 1 clinical activities for OLX702A, while Eli Lilly will take on other research and development and commercialization roles. OliX Pharmaceuticals also granted exclusive licensing rights to Eli Lilly regarding this.
The total contract amount is $630 million (approximately 911.7 billion won). This includes the advance payment from the contract signing and subsequent research and development milestones and commercialization milestones generated from the licensing agreement.
However, this agreement is a conditional contract, and revenue recognition from the main contract may vary depending on the success of clinical trials and product approvals. If regulatory agencies instruct a halt in research and development or if issues arise that prevent obtaining product approval, the contract may be terminated.