Expectations are rising that Yuhan's royalty revenue from Leclaza (ingredient Lazertinib), a Non-small cell lung cancer (NSCLC) treatment it licensed out, will increase. That is because the Leclaza–Johnson & Johnson (J&J) antibody therapy Rybrevant (ingredient Amivantamab) combination has been recommended for coverage under the United Kingdom's public health insurance.
Leclaza is an oral targeted anticancer drug that blocks signal transduction in lung cancer cells with epidermal growth factor receptor (EGFR) gene mutations. Developed by Yuhan, it was licensed out to J&J in 2018.
Rybrevant is a bispecific antibody therapy that targets EGFR and MET simultaneously, preventing cancer cells from proliferating through alternative pathways to evade treatment. When the two drugs are administered together, they are considered to have a greater tumor-suppressing effect than EGFR inhibitor monotherapy.
The industry expects the commercialization of the Leclaza–Rybrevant combination in the global first-line treatment market to accelerate further. J&J has been developing this combination as a strategic asset to replace monotherapy with the current standard Tagrisso (ingredient Osimertinib) or Tagrisso–chemotherapy combination therapy.
According to market research firm Global Information, the EGFR-mutant Non-small cell lung cancer (NSCLC) market is projected to grow to $300.99 million (about 435 billion won) by 2030. The compound annual growth rate is 7.24%. Among these, the first-line treatment market is cited as an area where pharmaceutical companies derive a large share of revenue due to the larger patient population and longer treatment duration.
◇Estimated royalties up to 15%… close watch on the direction of domestic coverage
The United Kingdom's National Institute for Health and Care Excellence (NICE) on the 21st (local time) issued final technology appraisal guidance (TA1122) recommending the combination therapy as a first-line treatment option for patients with advanced NSCLC harboring an "EGFR exon 19 deletion" or "exon 21 L858R" mutation. Previously, in July last year, NICE had postponed a coverage decision due to "insufficient cost-effectiveness."
In its guidance, NICE said, "This combination therapy has demonstrated clinical benefit and value for money, and in England, coverage under the National Health Service (NHS) must take place within 90 days after the guidance is finalized."
The United Kingdom is a key market for AstraZeneca, which owns Tagrisso. The fact that a competing drug has entered the reimbursement sphere there is seen as highly symbolic. Tagrisso posted worldwide sales of $6.58 billion (about 9.52 trillion won) in 2024, of which $1.755 billion (about 2.54 trillion won) came from Europe.
This underpins expectations for Yuhan's royalties. Yuhan transferred Leclaza's global commercialization rights to J&J in a structure that includes country-specific regulatory milestones and sales-based royalties. The market-estimated royalty rate for Leclaza is around 10%–15% of net sales. The deal size at signing was a total of $950 million (about 1.37 trillion won), including a $50 million upfront payment.
Sales of Leclaza and Rybrevant are currently rising steeply. J&J recently said in its earnings release that last year's combined sales of Leclaza and Rybrevant rose 124.4% year over year to $734 million. J&J has set an annual sales target of $5 billion (about 7.23 trillion won) for Leclaza and Rybrevant.
The convenience of the subcutaneous (SC) formulation of Rybrevant is also cited as a factor that could increase prescriptions for the combination therapy. While the existing intravenous (IV) formulation takes about five hours to administer, the SC formulation reportedly takes only five minutes. The SC formulation of Rybrevant received approval from the U.S. Food and Drug Administration (FDA) last month.
In Korea, attention is on whether NICE's decision will influence the review process of the committee for severe (cancer) disease reimbursement decisions. This is because the Health Insurance Review & Assessment Service (HIRA) often refers to overseas cases. The Leclaza–Rybrevant combination therapy failed to be listed for coverage at the committee's meeting this month, following a similar outcome in September last year.
An industry official said, "Because J&J recently suffered a setback at the committee, it needs to recalibrate its strategy," while noting, "It is also true that expectations have risen with NICE's reimbursement recommendation."
In this regard, Johnson & Johnson Korea said it is "working to ensure that all indications for Rybrevant can be reimbursed as quickly as possible."
◇Direct comparisons are difficult… can it overtake Tagrisso
It remains uncertain whether the Leclaza–Rybrevant combination will establish itself as the first-line standard of care. A key limitation is the lack of direct comparative data against the Tagrisso–chemotherapy combination. In its phase 3 trial, J&J set Tagrisso monotherapy as the comparator.
NICE also emphasized the importance of comparing combination therapies, saying, "Currently, more than about 30% of this patient group is receiving the Tagrisso–chemotherapy combination, and that number is likely to increase further."
Effectiveness and safety in older patients are also challenges. In J&J's phase 3 trial, the median ages of the two treatment arms were 64 and 63, respectively, and 55% of all patients were under 65. However, according to the industry, Non-small cell lung cancer (NSCLC) with EGFR mutations is more common in patients aged 70 or older. In the United Kingdom as well, the median age of patients receiving Tagrisso monotherapy is 70.
NICE said, "In patients under 65, the Leclaza–Rybrevant combination group reduced the risk of disease progression by about half compared with the Tagrisso monotherapy group, but among those 65 or older, there was little difference between the two treatments," assessing this as "a signal that the Leclaza–Rybrevant combination may be less effective in older patients."
Price is another variable. The Tagrisso–chemotherapy combination already uses relatively inexpensive chemotherapy agents due to their longer time on the market, whereas Rybrevant is a new drug and is priced higher. Another industry official said, "Even assuming reimbursement, a comparison between the combinations would likely show the Tagrisso–chemotherapy regimen to be cheaper."