UPDATE 1-Japan's Shionogi sells coronavirus drug rights to U.S. biotech BioAge

(Fixes typo in second paragraph, adds quote in third.)

TOKYO, Jan 26 (Reuters) - Shionogi & Co has sold the development and marketing rights for a COVID-19 treatment to California-based biotech BioAge Labs Inc, the Japanese drugmaker said on Tuesday.

Shionogi discovered the drug, known as BGE-175, and developed it to treat allergic rhinitis.

The compound is expected to help restore immune function and in turn “may reduce the severity of various infectious diseases, including COVID-19,” the company said in a statement.

BioAge will have exclusive rights to BGE-175 for the treatment of COVID-19 in the United States and Europe in exchange for an upfront payment as well as milestones and royalties, it added.

The U.S. biotech plans to start a Phase II trial of the drug for COVID-19 in the first half of 2021.

Shionogi is also developing a recombinant protein vaccine for COVID-19 that is now in combined Phase I and II trials in Japan.

The company is betting on a proven platform to help it become Japan’s biggest home-grown COVID-19 vaccine producer. (Reporting by Rocky Swift in Tokyo; Editing by Miyoung Kim, Michael Perry and Sherry Jacob-Phillips)