Hyundai Bioscience said Sunday that it will co-develop a broad-spectrum antiviral drug with the US National Institutes of Health, a federal agency for conducting and supporting medical research and the world’s largest public funder of biomedical research.

A non-clinical evaluation agreement was signed on Friday between Hyundai Bioscience USA, a US-based subsidiary of the Korean pharmaceutical company, and the National Institute of Allergy and Infectious Diseases under the NIH, the company added.

Under the agreement, Hyundai Bioscience USA will provide Xafty, or CP-COV03, the company’s COVID-19 antiviral candidate, to the NIAID, which will conduct preclinical animal studies first.

Xafty is a novel drug candidate that can be used against major viral infections, including COVID-19, SARS, MERS, influenza and RSV. To develop the candidate, Hyundai Bioscience has repurposed niclosamide as its active pharmaceutical ingredient.

Depending on the results from their preclinical studies, Hyundai Bioscience USA and the NIAID may also carry out phase 1 and 2 clinical studies in the future.

The NIH will be in charge of the clinical studies and cover all financial expenses, according to Hyundai Bioscience. The company estimated that expenses for phase 1 and 2 clinical trials will surpass 200 billion won ($150 million).

"Depending on the size of the clinical trials and how many viruses that the NIH will test with Xafty, the cost can be different," a high official from Hyundai Bioscience said.

If Xafty receives positive results from the clinical trials, the company will aim for fast-track designation for the drug and hopefully secure supply deals from the US government, the high official expected.

The latest signing came in line with the US government’s efforts to advance the development of antiviral drugs for treating COVID-19 and future virus threats in the future, marked by a $3.2 billion plan called the Antiviral Program for Pandemics.

According to local reports, it is the first time that the US program has decided to support the development of a broad-spectrum antiviral drug.

At home, Hyundai Bioscience has completed phase 2 clinical studies of Xafty, involving 300 patients. The company applied for emergency use authorization to the South Korean Ministry of Food and Drug Safety, but has yet to receive a green light.