Orion, one of Korea’s three largest confectionary companies, has emerged as the primary stakeholder in Legochem Biosciences, a company dedicated to developing antibody-drug conjugate (ADC) drugs.

On Monday, Legochem Biosciences said in a public filing that its major shareholder would shift from founder and CEO Kim Yong-zu to Pan Orion Corp. Limited through a share transfer agreement. Pan Orion is a Chinese subsidiary in which Orion holds a 95.15 percent stake.

Pan Orion will acquire 7.96 million new shares via a third-party placement and purchase an additional 1.4 million old shares from existing majority shareholders, CEO Kim Yong-zu and President Park Se-jin. Pan Orion will possess a 25.73 percent stake in LegoChem Biosciences through this arrangement, making a total investment of 548.7 billion won.

The agreement ensures that LegoChem Biosciences will maintain its current management team and operating system, with CEO Kim Yong-zu remaining at the helm. Pan Orion will actively engage in management by appointing directors and auditors during an upcoming general meeting of shareholders. The lump sum payment for the share purchase is scheduled for March 29.

In 2021, LegoChem Biosciences outlined its mid-to-long-term growth strategy, VISION 2030, aiming to identify at least five candidates annually and establish a pipeline with at least five additional clinical-stage products within five years.

Recently, the company finalized a technology transfer agreement with Janssen Biotech, a subsidiary of Johnson & Johnson, for the development and commercialization of Trop2-ADC, LCB84. LegoChem Bisociences anticipates receiving up to $1.7 billion, inclusive of an upfront payment, exclusive development rights, milestones, and royalties.

Following the announcement, CEO Kim Yong-zu explained the rationale behind the shift in majority shareholders in a letter to shareholders.

"At the close of last year, we devised a strategy to swiftly achieve VISION 2030, setting ambitious targets of four or five candidates per year—double the previous plan—10 clinical pipelines within five years, and becoming a leader in new ADCs including cancer immunotherapy," Kim said in the letter.

To realize these objectives, the company requires approximately 1 trillion won in R&D funding over the next five years, Kim went on to say.

“In addition to the current 220 billion won and the anticipated technology transfer revenue in the coming years, amounting to hundreds of billions of won, we aim to secure an additional 500 billion won in funding through this strategic partnership with Orion," he said.

For several years, LegoChem Biosciences has been seeking a long-term, amicable strategic partner who respects the company's autonomy, comprehends the high-risk, high-return nature of drug discovery and development, and is willing to acquire an equity stake of 20 percent or more.

“During the negotiation process, our conviction grew that Orion was the ideal strategic partner for us. The Orion Group, primarily engaged in the confectionery business, has demonstrated consistent growth through strategies like rapid global market expansion. Their pursuit of a new growth area in the biotech field led them to choose us,” Kim said.

Meanwhile, Orion has designated biotech as one of its top three new business priorities. Orion Holdings, the holding company of the Orion Group, initiated the formation of a joint venture named Orion Biologics with dental disease treatment company HysensBio in 2022. 

In 2023, Orion also made an effort to assume control of the management of the domestic bio company Alteogen but this attempt proved unsuccessful.