Microbiome (gut microorganism) therapeutics, once expected to offer solutions for a range of diseases, have hit a snag in Korea as they have failed to show clear clinical results. As uncertainty in new drug development grows and investor sentiment weakens, related corporations are shifting their focus to businesses such as cosmetics and health functional foods that can generate revenue relatively quickly.
The microbiome refers to the ecosystem of microorganisms such as bacteria and viruses that coexist in the human body. It is involved in nutrient metabolism and immune regulation and is known to be associated not only with metabolic diseases such as obesity, diabetes, and hyperlipidemia, but also with cancer and brain diseases. For this reason, microbiome research has been expected to be applicable across various disease areas.
According to the industry on the 4th, development of microbiome therapeutics in Korea is losing momentum as the financial burden and commercialization uncertainty grow in the later stages of clinical trials.
Hundreds of billions of won are invested to commercialize a single new drug, but success stories are rare, making it difficult to attract investment. In response, some corporations are scaling back or halting new drug development and shifting strategies to cosmetics and health functional food businesses that leverage existing technology.
The clearest example of this trend is Genome & Company. Founded in 2015 and listed on the KOSDAQ in 2020, Genome & Company drew attention as it entered clinical trials for the first microbiome immuno-oncology drug in Korea.
However, although it demonstrated significance in a domestic phase 2 trial combining the anticancer Microbiome Therapeutic candidate "GEN-01" with Merck and Pfizer's immunotherapy "Bavencio (avelumab)," it decided not to proceed to phase 3, halting development.
The company cited the uncertainty of marketability and the likelihood of commercial success relative to the hundreds of billions of won required for a phase 3 trial. Its microbiome contract development and manufacturing organization (CDMO) business, which once accounted for about 80% of sales, is also being wound down.
Instead, Genome & Company is focusing its capabilities on developing anticancer drugs centered on antibody-drug conjugates (ADCs) and on a microbiome-based cosmetics business. In particular, the microbiome cosmetics brand "UIQ" has expanded into several overseas markets, including the United States, Japan, China, and Indonesia, becoming a major source of revenue for the company.
This trend is common among other microbiome developers. KoBioLabs, which has been developing treatments for psoriasis and intestinal diseases, hit a wall after failing to secure key efficacy in a phase 2 trial for its psoriasis treatment. The industry expects it will take considerable time to enter subsequent trials.
However, the company is seeking a new breakthrough in the obesity treatment field, having registered a U.S. patent for an anti-obesity strain and pursuing development of an oral therapy aimed at weight control and improvement of metabolic diseases.
CJ Bio Science, launched by CJ CheilJedang, is also facing challenges. In 2023, it acquired 11 new drug pipelines from the U.K.'s 4D Pharma, expanding the total to 15, and is conducting combination trials in Korea and the United States of Merck's (MSD) immunotherapy "Keytruda" with the immuno-oncology candidate "CJRB-101."
Although it launched as a microbiome new drug developer in Apr. 2022 by acquiring ChunLab, founded by Seoul National University life sciences professor Chun Jong-sik, development has been slow and the burden of research and development (R&D) investment has grown, resulting in operating losses every year. The cumulative deficit for the third quarter this year reached 19.6 billion won.
In July, the company recruited former Huons CEO Yoon Sang-bae as its new chief executive. Given that Yoon also serves as CEO of CJ Wellcare, a health functional food subsidiary of CJ CheilJedang, the possibility of linking with the health functional food business to secure future R&D funding has been raised.
The industry cites stringent clinical design and a lack of approval and commercialization cases as reasons behind the weak performance of Microbiome Therapeutics. While more than 150 Microbiome Therapeutics are in development worldwide, only two products have received U.S. Food and Drug Administration (FDA) approval to date. Regulators are also still building clear evaluation standards, leading pharmaceutical companies and investors to view the field as high risk due to a lack of precedent.
Even with the same microbiome technology, cosmetics, health functional foods, and probiotics face relatively lighter regulatory burdens and can generate sales quickly.
As a result, the greater the uncertainty in new drug development, the more corporations are turning to those areas. The government's "National Microbiome Initiative," which is underway, is also limited to short-term research support, prompting calls for more long-term and consistent policy backing.
An official in the microbiome industry said, "Microbiome Therapeutics vary greatly from person to person and have complex mechanisms of action, making it difficult to prove consistent effects in clinical trials," and added, "Government projects tend to be centered on short-term research, so there is a real lack of funding and institutional support to carry studies through the later clinical stages."
The official added, "Without a support system that links clinical trials, regulation, and commercialization from a long-term perspective, corporations' attempts at new drugs will inevitably continue to be stifled."