Strategic Partnerships:
Several years ago, RegeneRx made the decision to become a virtual biomedical company and acquire partners to continue development of its product candidates. To that end, the Company entered partnerships around the world to develop some of its product candidates as briefly described below.
RegeneRx previously entered into a licensing agreement with Lee’s Pharmaceuticals, Inc. for development and marketing of Tβ4-related products in the countries of China, Macau, Hong Kong and Taiwan. Lee’s, through its subsidiary, Zhaoke Ophthalmology, is responsible for product development in the licensed territory and each party will share clinical and other data related to these product candidates. We believe the Zhaoke is awaiting results from U.S. clinical studies prior to initiating clinical trials in China with RGN-259.
RegeneRx also has a strategic partnership agreement with G-treeBNT (now HLB Therapeutics), a Korea biopharmaceutical company for development and marketing of RGN-259 in 28 Asian countries including Korea and Japan. HLBT also has a license to develop RGN-137 in the U.S. for dermal wound healing.
RegeneRx subsequently entered into agreements with HLBT to develop RGN-259 for dry eye syndrome and neurotrophic keratitis (an orphan indication) in the United States. Under the terms of a U.S. joint venture agreement between the parties (ReGenTree LLC), HLBT is responsible for conducting and funding all clinical trials and product development through approval of a biological license (BLA). Pursuant to the terms of a license agreement between RegeneRx and the joint venture entity, RegeneRx granted the JV an exclusive, royalty-bearing license to market and sell RGN-259 in the U.S. RegeneRx also contributed all of its non-clinical and clinical data generated to date.
In May 2024, we met with our Korean partners from HLB Therapeutics (HLBT) regarding our mutual interests in modifying our ReGenTree joint venture to create an organization that would be both attractive and easy to be acquired by a multinational pharma company when our phase 3 trials are successfully completed. In that regard, we agreed that by HLBT contributing all licensed Asian rights to RGN-259 (except for Greater China, which are licensed to Zhaoke Ophthalmology) and by RegeneRx contributing its otherwise unencumbered worldwide rights to the JV, we would be in a better position to be a very attractive acquisition to big pharma in the future, assuming our phase 3 NK trials are successful. Rights contributions to the JV by both parties are subject to the same terms, conditions and royalties as currently exist in the license to the JV, subject to any future modifications, if appropriate. In return for its rights contribution, RegeneRx received a fee of $150,000 and return of 50% of the RegeneRx shares owned by HLBT (97,917 shares post-reverse split), which amounts to approximately 6.5% of the currently outstanding shares of RegeneRx stock. In anticipation of a significant increase in development costs by HLBT, we agreed to modify the equity split between RegeneRx and HLBT to 30% / 70% as this still falls within our floor of a 25% equity position in the JV through FDA regulatory approval. In the event the ReGenTree entity is acquired or there is a change of control that occurs following achievement of an NDA, RegeneRx shall be entitled to 40% of all change of control proceeds paid or payable and will forgo any future royalties. We also agree that HLBT would receive the first $5 million from any third-party transaction as consideration for future expenditures on behalf of the JV.
Under the terms of the ReGenTree license agreement, RegeneRx will receive commercial royalties ranging from high single digits to low double digits, depending on medical indications approved and if ReGenTree’s ophthalmic product candidates are commercialized internally or through a third party. RegeneRx is not required to provide any funding for the venture and has the right to participate in all key development and commercialization decisions under the agreements, including the right to approve key commercial relationships and transactions, such as product licensing, mergers or acquisitions.
Future Plans:
Our primary goal is to maximize our stockholders’ equity in the Company and the JV upon success of the phase 3 NK clinical trials. Such success, we believe, would create significant value to RegeneRx and its stockholders and provide several options to us including the sale of RGN-259, a sale of the Company, or new financing alternatives that are not currently available. Our focus will be to identify an appropriate liquidity event as early as practicable and distribute any proceeds to our stockholders.