Kainos Medicine said Friday that its HIV drug KM-023 has entered into the final stage of phase 3 clinical trial in China, raising expectations about royalty income through its commercial sales.

The company, which is seeking to be listed through a merger with Hana Financial No. 11 Special Purpose Acquisition Company, said it is waiting to administer the drug on the final patient in the first half of this year, as KM-023’s phase 3 clinical trial is going on smoothly.

The company believes that KM-023 can be an alternative to other HIV drugs such as Efavirenz and Rilpivirin due to KM-023's competitiveness in safety. Unlike the existing HIV treatments that have side effects such as the birth of a malformed baby and degenerative brain disease, KM-023 showed no such ill effects in the first clinical trial and showed excellent antiviral effects. Also, KM-023 demonstrated the same results as existing medicines with only a quarter of doses of the latter.

Kainos Medicine transferred its technology to Jiangsu Aidea Pharmaceuticals of China after completing the phase 1 clinical trial in 2014. The Chinese Food and Drug Administration (CFDA) designated KM-023 as a fast-track review drug amid the increase of patients who cannot receive high-cost treatment.

Jiangsu Aidea has sales rights in China, and Kainos Medicine has the global sales rights of KM-023. Kainos Medicine received $170 million for technology transfer, and will also get 2 percent of single compound agent sales as a royalty.

"A very low percentage of trial subjects have dropped out in phase 3 clinical trials currently underway, and we have high expectations for the approval," a company official said. "We are aiming to take up 30 percent of China’s HIV treatment market within three years of its release. The Chinese government has included KM-023 in its pharmaceutical innovation project, and we are planning to sell prototypes with active support and management from the Beijing government."

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