KOSDAQ-listed LigaChem Biosciences is currently conducting clinical trials for LCB84, an antibody-drug conjugate (ADC) candidate. This was transferred to Janssen Biotech, a subsidiary of Johnson & Johnson (J&J), in Dec. 2023.
Conventional chemical anticancer drugs flow through blood vessels and destroy not only cancer cells but also normal cells, resulting in a relatively high risk of side effects. ADCs selectively destroy only cancer cells and solve this problem. That is why ADCs are called "guided missiles for capturing cancer cells."
LigaChem Biosciences received a $100 million upfront payment (130 billion won) at the time. Including a $200 million (290 billion won) payment for exercising exclusive development rights and milestones received step by step upon success in development and approval, it can receive up to $1.7225 billion (2.5 trillion won). Royalties generated by sales are paid separately.
◇ If U.S. Janssen exercises its rights, $200 million can be received
LCB84 applies LigaChem Biosciences' ADC technology and an antibody introduced from the Italian pharmaceutical company Mediterranea. LigaChem Biosciences and Janssen Biotech are jointly conducting phase 1 and 2 trials. Under the contract structure, if Janssen Biotech exercises the right to develop exclusively before the end of phase 2, $200 million can be received.
A LigaChem Biosciences official said, "We are currently in phase 1, and Janssen Biotech can exercise the exclusive development rights before the end of phase 2," adding, "After that, Janssen will handle development and commercialization."
Seo Mi-hwa, an analyst at Mirae Asset Securities, said, "Phase 1 could be completed as early as this year, and phase 2 is expected to be finished in 2027," noting, "The option could be exercised before then, so it is worth watching."
◇ Cumulative operating loss of 33.4 billion won in the third quarter last year… research and development expenses up 85%
LigaChem Biosciences was founded in 2006 by Chief Executive Kim Yong-ju, formerly of LG Chem. Kim joined LG Chem in 1983 and served as head of the Technology Research Institute and head of the New Drug Research Institute. LigaChem Biosciences was listed on KOSDAQ in 2013, seven years after its founding. Its market capitalization is about 6.8 trillion won based on the closing price on the 4th (185,700 won).
LigaChem Biosciences posted 125.6 billion won in revenue on a consolidation basis in the first to third quarters last year. It rose 36% from a year earlier. It is analyzed that transferring technology to companies such as Japan's Ono Pharmaceutical and receiving milestones contributed to the improved results. However, it recorded an operating loss of 33.4 billion won, widening the deficit from a year earlier. Research and development expenses were 134.5 billion won, up 86% from a year earlier.
Orion Group invested 550 billion won in LigaChem Biosciences in Jan. 2024. As of the end of the third quarter last year, Pan Orion, Orion Group's Hong Kong corporation, holds 25.58% equity in LigaChem Biosciences. The combined stake of the largest shareholder, including Kim (3.35%), and related parties is 29.62%. Dam Seo-won, executive vice president of Orion and the eldest son of Orion Group Chairman Dam Chul-gon, concurrently serves as an inside director at LigaChem Biosciences.