(Yicai Global) Aug. 9 -- Chinese pharmaceutical company Sichuan Kelun Pharmaceutical Co. [SHE:002422] will license American biopharmaceutical company Pieris Pharmaceuticals. Inc. [NYSE:PIRS] to use its proprietary invention patent for development of a tumor immunology product.

Kelun's controlled subsidiary Sichuan Kelun Bio-Tech Pharmaceutical Co. and Pieris signed a license agreement on Aug. 8, per which the former will assign its rights to a patent that relates to tumor immunotherapy monoclonal antibodies to the latter for development of a tumor immunology product, Kelun announced.

Pieris will pay development expenses of at most USD26.5 million to Kelun Bio-Tech. After the product hits the market, Kelun Bio-Tech will receive sales-based royalties at a prescribed ratio when turnover volumes reach differential objectives. Royalties Pieris will pay to Kelun Bio-Tech shall be no more than USD67.5 million.

This technology will be used to develop an immune checkpoint inhibitor, which refers to a protective factor in the human immune system which can prevent excessive activation of immune cells. Tumor cells take advantage of its characteristics to over-express immune checkpoint factors to suppress the immune system's reaction. The inhibitor can reactivate the immune cells' immunoreactions to the tumor to resist it. The agreement encapsulates the company's progress in globalizing innovative drugs, which will lift its technological and market value, Kelun said.