San Diego-based MEI Pharma licensed its drug candidate to Japanese company Kyowa Hakko Kirin, receiving $10 million up front, with an additional $87.5 million in development milestones and sales royalties possible if the drug wins approval in Japan.

Kyowa Hakko Kirin gained exclusive rights to develop and commercialize in Japan ME-401, intended to treat cancerous B-cell malignancies. The company plans to initiate an early-stage trial — or Phase 1 study — in Japan next year.

ME-401 is what’s known as a delta inhibitor, as the PI3K delta fuels the spread and survival of cancer cells.

“This agreement is important for MEI as an opportunity to expand the development of ME-401 as a potential best-in-class PI3K delta inhibitor outside of the U.S. and is consistent with our strategy to optimize value through partnering opportunities abroad while developing capabilities for domestic commercialization,” CEO David Urso said in a news release.

In the United States, MEI Pharma plans to initiate a mid-stage trial of ME-401 for relapsed or refractory follicular lymphoma, the initial indication.