Despite large losses, LigaChem Biosciences, an antibody-drug conjugate (ADC) development corporations, is accelerating a pipeline overhaul by expanding research and development (R&D) investment. The strategy is to secure mid- to long-term growth through technology transfer results even at the expense of worsening profitability.
On the 8th, according to the industry, LigaChem Biosciences signed a new technology in-licensing agreement with domestic biotech corporations Paion Biotechnology. Paion is a company developing a therapy that restores function by transplanting healthy mitochondria into damaged muscle cells, and the view is that LigaChem has secured an antibody technology based on a new mechanism.
The deal came just days after the company trimmed its existing pipeline. On the 3rd, LigaChem Biosciences returned one antibody it had in-licensed from an existing partner, citing a mismatch with its development direction. Because it was wound down before clinical entry, there was no expense burden such as stepwise milestone payments.
After decisively streamlining its development asset and immediately filling in with new technology, analysis suggests LigaChem Biosciences is speeding up its pipeline reorganization with a "selection and concentration" approach.
This move continues even as profitability deteriorates. LigaChem Biosciences posted revenue of 141.5 billion won last year, up 12.4% from a year earlier, maintaining top-line growth, but its operating loss widened to 106.4 billion won.
The company cited increased R&D expense due to building new pipelines and expanding clinical development. In fact, it executed R&D investments in the 200.0 billion won range last year and plans to invest even more this year. The strategy is to focus on securing technology transfer outcomes over short-term profitability.
Founded in 2006, LigaChem Biosciences has built a business model of in-licensing antibodies from outside, applying its in-house ADC platform "ConjuAll," and then out-licensing to global pharmaceutical companies. To date, it has signed a total of 12 technology transfer deals worth about 9.6 trillion won.
A key reason for this preemptive investment is that major pipeline milestones are scheduled this year. "LCB14," a breast cancer treatment candidate transferred to China's Fosun Pharma, is in phase 3 and is expected to file for marketing approval in the second half. "LCB84," licensed by Janssen, a subsidiary of Johnson & Johnson (J&J), is set to enter phase 2 in the second half.
"LCB71," a blood cancer treatment candidate transferred to China's CStone, is slated to announce phase 1b results in June, and partners including the United Kingdom's Iksuda Therapeutics and the Czech Republic's SOTIO are also preparing to submit investigational new drug (IND) applications within the year.
As clinical progress continues across major pipelines, the view is that milestone inflows will also begin in earnest.
The industry is watching to see whether LigaChem Biosciences can drive a rebound in results through technology transfer outcomes by pursuing a strategy that pairs R&D investment with pipeline restructuring, even at the cost of losses.
Lee Ho-cheol, a senior research fellow at Shinhan Investment & Securities, said, "LigaChem Biosciences has secured differentiated competitiveness by improving drug conjugation uniformity and safety through ConjuAll, which is based on next-generation linkers and payloads," adding, "Given that the ADC market is expected to grow rapidly, if technological prowess is proven, even a latecomer can quickly secure market share; this year's key pipeline clinical results could lead to large-scale technology transfers."