Protherics has signed the agreement with Myungmoon Pharm, who will develop the company's ReGel delivery technology for locally administered anti-inflammatory products to treat arthritis as well as other potential indications.
Protherics will receive a 'small' upfront payment from Myungmoon, as well as royalties on any net sales in the Republic of Korea.
According to the terms of the deal, Protherics also has an option to the global rights outside the Republic of Korea to any products developed under the agreement.
Protherics gained access to the novel drug delivery technology through it's acquisition of US drug development firm MacroMed in January this year.
The sustained release system is based on a thermosetting biodegradable gel, which is liquid at room temperature but solidifies once it is injected.
The system is designed for local administration, to deliver high concentrations of drug to the desired area over a sustained period or around four to six weeks.
The MacroMed acquisition also added a promising cancer treatment based on the ReGel system to Protherics' portfolio.
OncoGel is a ReGel-formulated version of widely used chemotherapeutic paclitaxel, which has recently completed Phase IIa studies in oesophageal cancer.
The formulation is designed to be administered directly to the tumour site, releasing drug continuously over the four to six week period.
Delivering paclitaxel in this way achieves far greater concentrations of the drug in the tumour than when delivered at the maximum tolerated doses intravenously, according to Protherics.
The system also greatly reduces the incidence of side effects, as systemic exposure to the drug is limited due to local administration at the tumour site.
OncoGel is being evaluated for the treatment of brain cancer as well as oesophageal cancer and, presuming all trials progress well, the treatment should make it to market by 2011.
Combined, these two indications alone offer a US market potential of over $300m (€213m) according to Protherics' estimates.
This isn't a bad prospect given that drug delivery as such isn't one of the company's core activities.
A number of other companies have shown interest in formulating their proprietary compounds with the ReGel system, and the firm has said it is open to further collaborations with pharmaceutical firms interested in taking advantage of the sustained release technology.