GNI (TOKYO: 2160) has in-licensed a late-stage hepatitis drug from EpiCept (NSDQ: EPCT). GNI now owns the rights for EP1013 in Asia, Australia and New Zealand, while EpiCept retains control of the drug in the rest of the world. EpiCept will be paid an upfront license fee, and it can earn milestone payments and royalties, though specific details of the transaction were not disclosed.

GNI, which is based in Japan, will put its wholly-owned China subsidiary, Shanghai Genomics, in charge of the pre-IND and clinical development of EP1013. The compound is a di-peptide small molecule that showed potent inhibitory effect on caspases in animal tests. Caspases are part of a cell’s process of apoptosis or cell death. The compound was also effective in pre-clinical work against liver failure, brain ischemia and myocardial infarction. Recently, it was reported that, based on animal tests, EP1013 may be effective as part of a regimen for islet cell transplantation in patients with diabetes.

GNI has another hepatitis drug already in development, F351. In November 2007, GNI received a China patent for the compound and began a Phase I trial of F351 for liver fibrosis, the scaring of the liver that results from injury or long-term inflammation. Viral infection and chronic inflammation can cause uncontrollable production of collagen, which is deposited in the liver and forms scar tissue. The scar tissue can lead to liver cirrhosis and organ failure. In animal models, F351 inhibited excess collagen production, which slowed or reversed liver fibrosis.

GNI said that it would continue to pursue both in-house development and external co-development of new drugs.

EpiCept focuses on drugs that treat cancer and alleviate pain. The company uses its proprietary ASAP technology, a live cell high-throughput caspase-3 screening technology, to identify new cancer drug candidates, which may explain how it developed a caspases-related compound outside of its main focus. EpiCept does not seem to be emphasizing its own development of EP1013.