[Reporter’s Notebook] Is NeuroBiogen’s tisolagiline really worth $4.5 billion?

NeuroBiogen's Wednesday announcement of a 6.5 trillion won ($4.55 billion) licensing deal with U.S.-based Scilex Bio for its experimental oral drug tisolagiline has certainly grabbed headlines in the Korean media. 

The drug, targeting both obesity and Alzheimer's disease, is still in phase 2a trials, yet the Korean company said the deal includes a 30 billion won upfront payment, with a total package valued at 6.5 trillion won when milestone payments and royalties are included.

But how realistic is this figure?

Let’s start with the basics. Scilex Holding Company, the parent of Scilex Bio, currently has a market capitalization of just $36.23 million—about ₩51.6 billion at today's exchange rate.

That is not even a tenth of the total deal value and the fundamental question emerges: How can a company with a market capitalization of just $36 million possibly commit to a deal worth more than $4.5 billion?

Even if we add Scilex’s 2023 revenue, which NeuroBiogen previously cited as $46.74 million (₩66.6 billion), the numbers still don’t match the scale of the purported deal.

Industry insiders have expressed similar skepticism.

"This doesn't make sense,” an industry official told Korea Biomedical Review (KBR). “Companies estimate market sales and valuations differently and while obesity drugs like Wegovy or Mounjaro can generate huge revenues, given the clinical trial stage and the upfront fee, this deal lacks credibility."

For a multi-trillion won deal, the upfront payment should be at least 100 billion won—significantly higher than the reported 30 billion won, he added.

The most problematic part of the announcement lies in its sales projections.

In response to KBR's questions about the origin of the 6.5 trillion won valuation, a NeuroBiogen official explained that the figure was "derived from a combination of market due diligence, commercial forecasting, and internal projections conducted jointly with Scilex during the pre-deal diligence phase."

According to NeuroBiogen's press release, the two companies evaluated market size, growth trajectories, and potential global penetration rates, ultimately arriving at internal forecasts of $13.5 billion for the obesity indication and $300 billion for dementia. The licensing package was structured based on these assumptions.

That last figure is particularly hard to believe.

Recent market research reports also paint a very different picture of the dementia drug landscape. Market.us estimates the global dementia drug market at $16.4 billion in 2023, expected to reach $34.1 billion by 2033. Research and Markets reports $18.43 billion in 2023, with a projection of $41.76 billion by 2034. Towards Healthcare forecasts $18.09 billion in 2024, growing to $39.16 billion by 2034. Grand View Research also puts the 2024 market size at $18.03 billion. Across all sources, the projected compound annual growth rates remain moderate, ranging between 7.6 and 8 percent.

Even extrapolating generously, the global dementia market by 2038 may reach $50 to $60 billion.

So where does NeuroBiogen’s $300 billion projection come from? If the company truly believes tisolagiline will alone drive six times the value of the entire projected market, that assumption deserves scrutiny—not celebration.

Consider Eisai’s Leqembi, one of the most high-profile Alzheimer’s drugs to reach the dementia market in recent years. Eisai forecasts global Leqembi sales of $279 million in 2024. NeuroBiogen’s $300 billion projection is over 1,000 times larger than that.

Even Samsung Electronics, Korea’s largest corporation, posted annual revenue of 300.9 trillion won in 2024. As NeuroBiogen’s $300 billion projection translates to 428 trillion won, this suggests that tisolagiline would out-earn Samsung Electronics.

More troubling is the pattern behind such inflated announcements. After the news, NeuroBiogen’s parent company, Synergy Innovation, hit its daily upper limit on the Korean stock exchange. The company’s shares shot up to 4,015 won, up 29.94 percent from the previous trading day, to end the market on Wednesday.

This type of sensationalized licensing PR -- backed by vague or exaggerated numbers -- frequently serves to temporarily boost stock prices before reality catches up. Time and again, retail investors pay the price.

With Scilex executives set to visit Korea later this month for a joint press event, there remains one fundamental question that must be addressed.

“Do you truly believe that tisolagiline will generate $300 billion in sales in 2038?”