Shares in Hanmi Pharmaceutical have taken a hit after Johnson & Johnson's Janssen handed back rights to HM12525A, a novel biologic GLP-1/Glucagon dual receptor agonist being developed for weight loss and blood glucose control in certain patients with diabetes.

According to the Korean drugmaker, while two Phase II trials carried out by Janssen achieved the primary target of weight reduction, “its blood glucose control in obese patients accompanying diabetes fell short of Janssen’s internal standards”.

An official at Hanmi Pharmaceutical was quoted by the Korea Biomedical Review as saying: “In Phase II studies, the treatment showed excellent efficacy in reducing weight in obese people with or without diabetes. We will have an internal review on the matter and confirm our plan for development as soon as possible.

“We are aware that it is not easy to develop a new drug but will not stop challenging to commercialise Korea’s first successful new drug in the overseas market.”

Janssen licensed exclusive global rights (excluding Korea and China) to the experimental drug in November 2015 in a deal valued at $915 million.

Shares in Hanmi dropped nearly 30% as investors digested news of the deal's demise.