LG Chem said on Thursday that it invested 707.2 billion won ($571 million) to complete the acquisition of Aveo Pharmaceuticals, a U.S. oncology-specializing biopharma firm, through LG Chem Life Science Innovation Center, and will finalize the last details of the merger on Friday this week.
The company received acquisition approval from Aveo's shareholders' meeting on Jan. 5. Earlier, it received the nod from the Committee on Foreign Investment in the U.S. (CFIUS) on Tuesday after approval of the HSR filing in the U.S. on December 1, 2022.
Accordingly, Aveo will be incorporated as a subsidiary of LG Chem but will operate under an independent management system based on its own U.S. anticancer business capabilities.
Through the acquisition of Aveo, LG Chem plans to transfer the new anticancer drug pipeline developed by LG Life Sciences to Aveo in the mid-to-long term to accelerate the commercialization of new anticancer drugs in the U.S.
“Currently, LG Chem is still developing its cell therapy and immune checkpoint inhibitors at the preclinical stage. So, we are not yet ready to transfer the pipeline but will do so later when the development reaches the clinical trials stage as Aveo has expertise there,” an LG Chem official told Korea Biomedical Review.
The anticancer drug market leads the growth of the global pharmaceutical market which is expected to increase by 10.4 percent annually from 250 trillion won in 2021 to 410 trillion won in 2026. Currently, the U.S. market accounts for more than 40 percent.
To secure global competitiveness through global new drugs, the company will invest 2 trillion won in R&D from this year by 2027 to release at least four new drugs in the field of anticancer and metabolic disease in the U.S. and other global markets by 2030.
This includes late-stage drugs from Aveo’s anticancer pipeline such as ficlatuzumab together with LG Chem’s LC350189 (ingredient: tigulixostat) for gout. By expanding its existing business portfolio in diabetes, vaccines, growth hormones, and anticancer drugs, it plans to achieve 2 trillion won in sales.
Aveo’s Fotivda has two approved indications for renal cell carcinoma surpassing 130 billion won in sales last year. Aveo is currently conducting additional clinical trials to expand the scope of Fotivda’s use with Bristol Myers Squibb, AstraZeneca, and NiKang Therapeutics for renal cell carcinoma and hepatocellular carcinoma. It is also speeding up the development of follow-up anticancer drugs such as ficlatuzumab for head and neck cancer treatments.
LG Chem CEO Shin Hak-cheol said, "We will focus on cultivating Aveo as a future bio-base that will lead the pioneering and growth of the anti-cancer business, maximize integrated synergies, and leap forward as a global top 30 pharmaceutical company centered on anticancer.'"
"We will strengthen the pipeline through this synergy and continue to release new drugs to improve patients’ quality of life," said Aveo CEO Michael Bailey.