Ann Arbor-based Velcura Therapeutics Inc. said Tuesday that it has a licensing agreement with Nippon Chemiphar Co. Ltd., a Japanese pharmaceutical company listed on the Tokyo Stock Exchange. The license agreement enables the two companies to further develop new small-molecule therapies for osteoporosis and other bone diseases. This is a critical unmet need, as osteoporosis is second only to cardiovascular disease as a world health problem, according to the World Health Organization. More than 100 million people worldwide suffer from it. The two companies also announced that they have discovered their first lead compound and shown it to be very effective in animal models of osteoporosis. In 2006, Velcura Therapeutics plans to begin clinical trials on this drug as a possible therapy for osteoporosis. In working together, the companies coupled Chemiphar's strong expertise in drug discovery with Velcura's patented process of growing human bone in tissue culture. The compound both inhibits bone loss and stimulates bone formation, and can be taken in pill form. In addition, Michael W. Long, Velcura's CEO, said he believes the drug can be formulated into a sustained-release form for treating people with bone fractures. The compound also might be used as a topical application to treat patients with gum disease, who have teeth loosened from the surrounding bone. Under the terms of the agreement, Velcura also licensed access to a broad range of similar molecules for use in research and development of second- generation drugs to treat bone diseases. Chemiphar will retain commercialization rights in Asia for any new product candidates, while Velcura will have commercialization rights in all markets outside Asia.