Korea Biomedical Review is publishing a series of articles to analyze the top 10 Korean pharmaceutical and biopharma companies with the largest market capitalizations listed on the main bourse, Kospi, and the tech-heavy Kosdaq. The series aims to reflect key industrial issues and the flow of the capital market in the Korean pharmaceutical and biopharma industry. This is the second installment. -- Ed.

LG Chem's life science division is growing.

The company's life science division ranked fourth among LG Chem’s five business units in terms of sales – petrochemicals, advanced materials, life science, energy solutions, and farm hannon.

Among the five, life science and energy solutions were the only two divisions that achieved sales growth in the fourth quarter of last year. 

During its online 2022 fourth-quarter earnings conference call, held on Thursday, the company said that the life science division recorded sales and operating profit of 909 billion won ($739.3 million) and 4 billion won, up 20 percent and 10.4 percent, from the previous year.

"As for the existing business, major products such as the diabetes treatment Zemiglo lineup and growth hormone continued to strengthen their market position and grew," said Yoon Soo-hee, vice president of LG Chem's vaccine and diagnostic business unit. "Humira biosimilar Zelenka's market share expansion in Japan and the polio vaccine's rapid growth of 20 percent compared to the previous year also led to solid profitability."

In terms of new drug R&D, Yoon stressed that the company's LC350189 (ingredient: tigulixostat), a new gout treatment drug candidate, has entered phase 3 clinical trials in the U.S. 

The possibility of commercialization in the Chinese market has increased through a licensing agreement with Innovent Biologics in China last December, she said.

"Most notably, the company acquired Aveo, an American anti-cancer drug company, in October of last year and finalized the process on Jan. 20," Yoon said.

The acquisition has allowed LG Chem to establish a bridgehead for global business expansion, she added.

₩1.2 trillion in sales expected in 2023

During the conference call, Yoon expected that the life science division’s sales would exceed 1.2 trillion won ($976 million) in 2023, thanks to the continued growth of existing business and the acquisition of Aveo.

"Although competition for some products, such as diabetes treatment, is expected to intensify, stable growth is expected to continue thanks to the new product lineup, such as Zelenka, Eutropin, and Espen, launched last year, and increased overseas sales of major products," Yoon said.

Yoon also outlined major new drug R&D plans for 2023, including full-scale global phase 3 clinical trials for LC350189, and plans to enter clinical trials for a new obesity treatment candidate.

"One of the key tasks for 2023, is to secure a global business foundation to lead the U.S. anti-cancer market through Aveo," Yoon said.

To this end, the company plans to internalize commercialization capabilities through early stabilization of Aveo and maximize the synergy between LG Chem and Aveo, she added.

Concerns remain over LG Chem's clinical progress

In a public filing on Jan. 10, LG Chem said it has withdrawn its European phase 3 clinical trial plan for LC350189.

The decision to withdraw the EU trial came after the company’s suspension of plans to conduct the same phase 3 clinical trial in China in November 2022.

However, the EU trial plan withdrawal drew curiosity from investors and the biopharmaceutical sector because LG Chem had stressed that it suspended the Chinese trial as the clinical design complied with the standards of the U.S. and EU.

"The company decided to suspend the trial in China as the Chinese authorities requested that the clinical trials be conducted according to its own treatment standards, which we could not accept," the company said during that time.

However, the company ultimately halted trial in the EU as well, despite stressing that it had followed all standards beforehand.

As a result, suspicion surrounding LG Chem's clinical plan is growing.

LG Chem also did not specifically disclose the revision the Spanish regulators requested.

"It supplementary opinion from the Spanish regulators is at a level that we can respond," the company said. "We plan to apply for phase 3 clinical trials again after discussing the appropriateness of the clinical design through an EMA Scientific Advice meeting."