Korean pharmaceutical and biotech companies have won 1.7 trillion won ($1.5 billion) worth license-out deals with foreign firms in the past three months, dispelling concerns about a biotech bubble and accounting issues at Samsung BioLogics.

Six Korean companies – CrystalGenomics, Kolon Life Science, ABL Bio, Yuhan Corp., Samsung BioLogics, and JW Pharmaceutical – have announced license-out deals since May.

Among them, ABL Bio’s agreement was the largest with the deal value reaching 613 billion won, followed by JW Pharmaceutical’s 450 billion won contract.

In July, ABL Bio agreed with TRIGR Therapeutics, a U.S. biopharmaceutical firm, to offer a license for the global commercial rights of the five anticancer antibodies for $550 million.

JW Pharmaceutical recently licensed out JW1601, an atopy treatment candidate, to Denmark’s Leo Pharmaceutical, for $420 million.

Another Korean biotech firm, CrystalGenomics had an agreement with U.S. firm Aptose Biosciences to grant rights to CG026806, a new drug candidate for the treatment of acute myeloid leukemia. In 2016, the company licensed out the global sales rights except for the Korean market. In June, it additionally gave the exclusive rights to develop and commercialize the drug within China.

The Korean firm was to receive $3 million upfront payment, and the total deal value was up to $125 million depending on development milestones.

In June, Kolon Life Science signed a deal to supply 15.3 million won worth Invossa-K, a degenerative arthritis treatment, in Hong Kong and Macao for five years. In the following month, it also inked a deal to export the therapy to China Life Medical Center and Hainan Province.

An unexpected deal surprised the pharmaceutical industry as well.

Yuhan Corp. licensed out the global sales rights of YH14618, a drug candidate for degenerative disc disease, to U.S. firm Spine Biopharma. The Korean drugmaker had once discontinued a trial over the drug. The deal involved a $650,000 upfront payment and could reach up to $217 million depending on milestones.

Samsung BioLogics said it agreed with an Asia-based pharmaceutical firm to manufacture 146.6 billion won biopharmaceutical products, although the company refused to give specific details to keep the contract classified.

The deal value is about 31 percent of the company’s 2017 annual revenue of 464.6 billion won. If the client firm’s demand rises, the minimum guarantee could also go up, Samsung BioLogics said.

‘Drugmakers need policy support for overseas market entry’

Despite a series of large-sized license-out deals, some remain skeptical about the prospects of pharmaceutical and biotech businesses.

Although the industry is recovering from uncertainties over alleged accounting fraud at Samsung BioLogics, many other drugmakers belatedly corrected their accounting books.

However, some pharmaceutical sources said they needed the government’s policy support to continue long-term and repeated investments in pharmaceuticals and biotech firms.

Drug companies have to go through scores of failures and challenges in all stages of new drug development, ranging from discovering a drug candidate to securing a clinical efficacy to commercializing.

In general, a drugmaker has to spend about seven to 10 years, and up to 1 trillion won in commercializing a novel medicine.

For example, it took 19 years for Kolon Life Science to develop Invossa and several more to win a license overseas.

“The government said it would nurture pharmaceutical and biotech industries, but I can’t see any change in reality,” an executive at a drugmaker said. “Except for a few innovative pharmaceutical firms, the reality is bleak for many. The government needs to study and execute an institutional tool to understand the characteristics of the pharmaceutical industry.”

sjh@docdocdoc.co.kr

<© Korea Biomedical Review, All rights reserved.>