Hanwha Chemical Corp., the country’s leading petrochemical firm, said on Monday it has reached a license agreement worth $720 million for its arthritis biosimilar with Merck Sharp & Dohme Research Ltd., a subsidiary of U.S. drugmaker Merck & Co.

Under the deal, the two companies plan to develop and commercialize the drug candidate named HD 203 together. Merck secures its sales rights in all countries except Korea and Turkey through the end of 2024, Hanwha said in a statement.

HD 203 is a biosimilar version of Enbrel, a blockbuster treatment sold by U.S. pharmaceutical giants Amgen Inc. and Pfizer Inc. for rheumatoid arthritis, plaque psoriasis and ankylosing spondylitis. Its global sales hit a record of $3.27 billion last year.

“This collaboration with a leading global health care company like Merck represents a significant event strategically and financially for Hanwha, and underscores the success of our biopharmaceutical strategy,” said Hong Ki-joon, president and chief executive of Hanwha Chemical.

Biosimilar drugs, or follow-on biologics, attempt to copy the original biopharmaceutical products with a reference to the predecessor for official approval.

With existing patents expiring on a gigantic scale, experts expect the new concept of medicine to take up nearly half of the market in the next few years.

Hanwha has been scaling up investment in biosimilar products as it seeks to diversify its business portfolio, alongside renewable energy, battery materials and nanocarbon technology.

By Shin Hyon-hee (heeshin@heraldcorp.com)