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Licensing-out deals boost pharmaceutical shares
  • By So Jae-hyeon
  • Published 2018.11.20 14:02
  • Updated 2018.11.20 14:02
  • comments 0

Pharmaceutical shares rose on Monday on two licensing-out deals by mid-size drugmakers, after suffering declines for some time.

Kolon Life Science inked a 670 billion won ($593.9 million) licensing-out deal to sell Invossa-K, an osteoarthritis treatment developed by subsidiary Kolon TissueGene, in Japan. CrystalGenomics clinched a 119.3 billion won contract to supply a novel medicine for degenerative arthritis to Russia on the same day. Biopharmaceutical firm Celltrion won U.S. approval to sell combination drug for patients with HIV-1 infection.

The series of winning deals and approval soothed concerns over a negative impact from the suspension of trading of Samsung BioLogics last week.

Kolon Life Science’s licensing-out deal with Mundipharma for Invossa-K sales in Japan involved a 30 billion won upfront payment. Mondipharma does not have to return the sales rights to Kolon Life Science.

Kolon Life Science said in a public disclosure that it would receive 15 billion won out of the 30 billion won after providing information for research, development, and commercialization within 60 days. It will get the remaining 15 billion won on a quarterly basis.

The Korean firm will also receive $565 million in milestone payments, and running royalties based on net sales.

During the contract period of 15 years, Mundipharma will have the exclusive license to research, develop, and commercialize Invossa’s patent and know-how in Japan, according to Kolon Life Science.

Kolon Life Science’s deal pushed the company’s stock price to hit a daily maximum to 82,800 won on Monday, rising 30 percent from the previous trading day. Kolon TissueGene also jumped 18.24 percent, or 7,250 won, to close at 47,000 won per share.

Novel drug developer CrystalGenomics has pioneered the Russian market.

The company said it clinched a deal with Russia’s PharmArtis International to sell Acelex (polmacoxib), the nation's 22nd novel drug treating degenerative arthritis, in Russia.

Under the agreement, CrystalGenomics will supply finished goods of Acelex to PharmArtis. The contract is valid for 10 years after the product launch. PharmArits will seek Russia’s regulatory approval for clinical trials and conduct marketing and distribution.

CrystalGenomics will receive $67.4 million (including the upfront payment) in milestone payments, besides the profits from Acelex exports. The deal is worth $105.7 million.

Acelex sold 4.8 billion won in the domestic market in 2017, according to IQVIA data. Acelex sales have steadily grown since the product launch. The latest deal with the Russian firm prompted CrystalGenomics shares to gain by 4.66 percent to close at 20,200 won on Monday.

Celltrion obtained the nod from the U.S. Food and Drug Administration for Temixys, the company’s first chemical combination drug for AIDS treatment in the global market. After gaining exposure as a biosimilar maker, Celltrion successfully entered the U.S. market with a new type of medicine.

Temixys is an oral antiviral treatment to treat HIV-1 infections. The drug combined GSK’s antiviral agent Zeffix (lamivudine) and Gilead Sciences’ Viread (tenofovir disoproxil fumarate). Celltrion had begun developing the combo therapy in 2016 and applied for FDA approval in January 2018.

The FDA’s green light for Celltrion’s first-ever chemical drug helped the company’s shares gain 2.23 percent to close at 229,000 won on Monday.

The licensing-out deals and Celltrion’s winning FDA approval drove up shares of pharmaceuticals by 2.65 percent on average on Monday from the previous trading day. Out of 119 pharmaceutical stocks, 91 rose, and only eight remained unchanged.

Kolon Life Science had the steepest gain with the maximum daily rise of 30 percent, followed by Jeil Pharma Holdings which increased 10.74 percent to 24,750 won. Celltrion Pharm went up 8.41 percent to 69,600 won.

HanAll Biopharma rose 7.02 percent (30,500 won), Celltrion Healthcare, 6.75 percent (77,500 won), CTC Bio, 6.64 percent (9,160 won), Yuhan Corp., 6.04 percent (254,500 won), and GL Pharm Tech, 5.4 percent (4,000 won).


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