(Yicai Global) Dec. 22 -- A unit under Huadong Medicine Co. has spent USD33 million to buy an exclusive license to the intellectual property and commercialization rights to a world-leading drug for type 2 diabetes across 16 countries and regions.

Hangzhou Zhongmei Huadong Pharmaceutical Co. penned the deal for the TTP273 drug with North Carolina-based vTv Therapeutics LLC, the former's parent said in a statement yesterday evening.

TTP273 has completed phase IIB studies in the US, which determine the optimal dose of the drug. The Chinese firm plans to conduct further clinical research and then register, license and commercialize the drug in the proposed territories, it added.

Under the agreement, the Huadong division will pay additional fees of up to USD50 million in four tranches, based on sales volumes, and pay royalties of between 1 and 10 percent of annual revenue generated from sales of the drug.

TTP273 is a first-in-class orally administered medicine. Clinical studies conducted in the US show it is able to reduce glycohemoglobin in patients without major side effects, the statement said.

The deal will allow the Chinese firm to distribute the drug exclusively in mainland China, Hong Kong, Macao, Taiwan, South Korea, Australia and ten other countries under the Association of Southeast Asian Nations.

Huadong will continue to transition to an innovative drug firm from a generic medicine company, it added, saying it will step up its marketing and become more competitive through independent research and global cooperation.