HLB said it would merge with its subsidiary Elevar, a U.S.-based developer of a targeted anticancer therapy rivoceranib. Elevar is the new name of LSK BioPharma.
HLB USA, a subsidiary of HLB, clinched a deal on Friday to acquire a 100 percent stake of Elevar. HLB USA is a wholly-owned subsidiary of HLB. Upon the completion of the merger, HLB will achieve a triangular merger as HLB Chairman Jin Yang-gon planned in June. The merger is scheduled to be finished on Nov. 15.
“The merger aims to resolve questions as to why a new anticancer pipeline rivoceranib was being developed by a subsidiary, not a parent company,” Jin said in an investor relations briefing in June.
To acquire Elevar, HLB set up HLB USA in the U.S. and decided to provide HLB shares for Elevar shareholders in exchange for the merger. However, the company has not revealed further progress since June, and the market raised concerns over the merger.
Ahn Ki-hong, vice president of HLB in charge of the merger, said the merger was about 15 days behind the original schedule. “Because it was the first case of the triangular merger with an overseas subsidiary in Korea, it took more time to review the legal and licensing procedures in Korea and the U.S.,” he said. “As the final review is completed, there will be no interruption in the future schedule.”
After the merger with Elevar, HLB will have the ownership of rivoceranib and benefits of its commercialization around the world except for China.
HLB is expected to have the first pre-New Drug Application (NDA) meeting with the U.S. Food and Drug Administration on Oct. 24 to seek approval for rivoceranib as a gastric cancer treatment.
The global phase-3 ANGEL trial showed that rivoceranib failed to meet the primary endpoint in terms of overall survival but proved its efficacy in progression-free survival, which was the secondary endpoint.
“With the merger, we have completed the big picture where HLB becomes the final beneficiary of a globally commercialized rivoceranib,” Jin said.
The merger allowed Paul Chen, the original developer of rivoceranib at Advenchen Research Institute, to join as a shareholder of HLB.
Chen holds a 12.5 percent stake in Elevar through Advenchen Research Institute. Under the merger, his shares will be converted to HLB shares.
He was also appointed as a board member of Elevar last month. HLB said Chen would boost the collaboration of Advenchen Research Institute, an R&D firm developing various pipelines, and HLB.
“The merger will maximize the synergy between the two companies. Starting with a gastric cancer drug, we will release anticancer medicines to treat five cancer, including liver cancer and colon cancer within five years, and grow as a global pharmaceutical giant,” an official at HLB said.