Coya Therapeutics and Dr. Reddy’s Laboratories have signed a licensing deal potentially worth up to $733m for COYA 302, the former’s investigational treatment for amyotrophic lateral sclerosis (ALS).

COYA 302 is a biologic combination therapy candidate that has a dual immunomodulatory mechanism of action to improve the anti-inflammatory function of regulatory T cells (Tregs).

It is a co-pack kit that consists of a combination of low-dose IL-2 and CTLA-4 Ig (abatacept).

Dr. Reddy’s North America CEO Marc Kikuchi said: “With this promising biologic product, we hope to reach many more patients around the world in keeping with our aim of serving over 1.5 billion patients by 2030.”

According to the terms of the agreement, Coya Therapeutics has granted exclusive commercialisation rights to Dr. Reddy’s for COYA 302 in the US, Canada, the European Union, and the UK for ALS.

Coya Therapeutics retains the right to commercialise COYA 302 in Mexico, Japan, and all of South America for the neurodegenerative disease.

The American biotechnology firm will be responsible to clinically develop the biologic combination therapy candidate and for obtaining regulatory approval in the US for ALS.

Dr. Reddy’s will provide Coya Therapeutics an upfront payment of $7.5m.

The India-based pharma company will also pay an additional $4.2m upon the US Food and Drug Administration’s (FDA) initial acceptance of an investigational new drug (IND) application for COYA 302.

According to Coya Therapeutics, the IND application is expected to be submitted in the first half of 2024.

The American firm also stands to be paid $4.2m by Dr. Reddy’s upon dosing the first patient in COYA 302’s first Phase 2 trial in ALS in the US.

Besides, Coya Therapeutics is entitled to receive up to $40m in the form of  development and regulatory milestones payments.

Furthermore, the biotechnology company can receive up to $677.25m in sales-based milestone payments, contingent on reaching certain tiers of cumulative net sales over several years.

Additionally, royalties will be paid by Dr. Reddy’s to its US partner based on a percentage of COYA 302’s net sales. These will range from low to middle teens.

Coya Therapeutics CEO Howard Berman said: “While the agreement provides the financial resources to execute on the Phase 2 clinical programme for COYA 302 in ALS, the strategic value of the partnership contributes much more than capital.”