SK Biopharmaceuticals(326030)'s reason for investing up to 1.1 trillion won to in-license the epilepsy drug candidate "opacalim" is that the existing product Cenobamate is approaching a patent cliff. Cenobamate is a flagship item that accounts for 90% of total sales, but its patent expires in 2032. SK Biopharmaceuticals needs a next-generation item that can steadily generate revenue to follow Cenobamate.
Opacalim, which SK Biopharmaceuticals secured with a large outlay, is currently in phase 2/3 clinical trials. Because it is not in the early clinical stage and could be planned for market launch as early as three years from now, SK Biopharmaceuticals is analyzed to be spending an amount equivalent to 70% of its annual sales as an upfront payment. However, the fact that competitors are developing epilepsy treatments on a faster timeline is cited as a variable.
◇ Cenobamate, which accounts for 90% of sales, patent expires in 2032
SK Biopharmaceuticals disclosed on the 26th that it signed a contract to in-license the epilepsy drug candidate opacalim and others from Biohaven, which is listed on the New York Stock Exchange. The upfront payment is $400 million (553.2 billion won), and the maximum contract size, including milestones (license fees) tied to development and approval stages, is $795 million (1.0996 trillion won). Compared with SK Biopharmaceuticals' consolidated sales of 706.7 billion won and operating profit of 203.9 billion won last year, the size of the upfront payment is considered significant.
The reason SK Biopharmaceuticals is investing such a large amount is that it needs a follow-up growth engine. SK Biopharmaceuticals has been selling the epilepsy drug Cenobamate in the United States under the name Xcopri. Cenobamate's core substance patent expires in 2032. When a patent expires, generics usually flood in and can erode market influence. Extending life through formulation changes or expanded indications is possible, but it is not a fundamental solution. From SK Biopharmaceuticals' standpoint, it needs to bring in a new item that can reliably generate cash beyond a single product, Cenobamate.
Biohaven's opacalim was selected in line with this calculation, according to analyses. Opacalim is currently in phase 2/3 trials for adult patients with focal onset seizures. The first key clinical endpoint could come by the end of this year, with the second trial results expected in 2028. Absent major issues, SK Biopharmaceuticals aims to apply for U.S. Food and Drug Administration (FDA) approval and launch opacalim in 2029. The compound patent for opacalim runs through 2039.
If development proceeds without setbacks, a follow-up product could defend the market before Cenobamate's patent expires. From SK Biopharmaceuticals' perspective, it would secure time to invest in various research and development (R&D) efforts, including radiopharmaceuticals. An SK Biopharmaceuticals official said, "The board resolved to adopt this investment policy for opacalim." Chey Yoon-chung, head of strategy at SK Biopharmaceuticals, was also reported to have overseen the companywide strategic direction.
◇ FDA approval filing likely to be later than rivals
Epilepsy is a disease in which nerve cells in a specific area of the brain become abnormally excited and repeatedly cause seizures. Central nervous system (CNS) diseases such as epilepsy are considered difficult fields for new drug development because types and causes vary by patient.
SK Biopharmaceuticals is said to have begun discussing the in-licensing of opacalim after meeting Biohaven officials at the American Epilepsy Society annual meeting at the end of last year. After reviewing animal and clinical data and conducting various due diligences, the companies are understood to have signed the contract.
New drug development, however, is a business where 100% success cannot be guaranteed. Even after clearing hurdles to win FDA approval and launch, there remains the task of surviving market competition. Global pharmaceutical company Xenon Pharmaceuticals is developing the epilepsy treatment candidate azetucalner. It is reported to be planning to file with the FDA in the third quarter of this year. Its development timeline is ahead of SK Biopharmaceuticals.
SK Biopharmaceuticals instead plans to penetrate the market by emphasizing that opacalim is safer than existing therapies. Because epilepsy drugs must be taken for a long time, medical professionals inevitably focus on medicines with fewer side effects. If the existing Cenobamate was prescribed for severe patients, the company plans to use its roughly 150-person U.S. subsidiary sales force to detail and directly sell opacalim so it can be prescribed to early-stage patients as well.
The biotech industry is watching opacalim's clinical readouts to be announced at the end of this year. The view is that it must be effective enough to compete with Xenon Pharmaceuticals while also having fewer side effects.
Kim Seung-min, an analyst at Mirae Asset Securities, said, "We need to check how much seizure frequency was reduced compared with placebo, and what the discontinuation rate is due to adverse events such as dizziness, drowsiness, or fatigue."