Korea drug industry buoyed by Hanmi Pharmaceutical

By Park Sae-jin Posted : November 11, 2015, 15:48 Updated : November 11, 2015, 15:48
One of the hottest stocks in Korea right now is Hanmi Pharmaceutical.

The company emerged as a rising star in the local stock market after clinching a set of mega-license deals with global pharmaceutical giants Sanofi and Janssen on experimental, long-acting diabetes and obesity therapies, which could generate billions of dollars for Hanmi.

The deals demonstrated the growing power of Korea as a force in pharmaceutical research and development in the Asia-Pacific region, significantly lifting shares prices of Hanmi and other Koran drug makers.

Within a span of one month, Hanmi’s share prices doubled to 784,000 won as of Nov 10. Some local equity analysts have raised the drug maker’s target stock price to one million won, based on the rosy outlook for growth in profits.

On Nov 5, the country’s biggest pharmaceutical company set a milestone in the local pharmaceutical industry by sealing a mega-license deal with France's Sanofi to develop experimental, long-acting diabetes treatments.

Hanmi will receive an upfront payment of 400 million euros ($434 million) and is eligible for up to 3.5 billion euros in development, registration and sales milestones, as well as double-digit royalties on net sales, according to press releases from both companies.

Sanofi will receive an exclusive worldwide license to develop and commercialize Hanmi's so-called GLP-1 diabetes treatments. Hanmi will retain an exclusive option to co-commercialize the products in Korea and China.
It is the largest deal to date between a local drug maker and a foreign company.

With its diabetes business struggling, Sanofi, France’s biggest company by market value, is seeking to boost competitiveness in the long-acting area with a tie-up with Hanmi.

"The agreement to develop these three investigational diabetes medicines confirms Sanofi's long-term commitment to people with this disease," said Pascale Witz, Executive Vice President, Sanofi. "We now have the opportunity to expand our existing portfolio by including medicines that are administered weekly as well as daily, which could extend our reach in basal insulin and expand our GLP-1-RA and GLP-RA/insulin combination prospects. In these ways, we aim to complement our current offerings and work to serve a broader patient population."

Nearly 400 million people worldwide have diabetes, with type 2 accounting for more than 90 percent of cases.

Sanofi will license the Quantum Project, a new pipeline of a long lasting-diabetes treatment, applying Hanmi’s LAPSCOVERY (Long Acting Protein/Peptide Discovery), which maximizes treatment by limiting the number and dose of administered medicines.

"We are pleased that Sanofi with its long heritage and as a proven leader with solid track of success in diabetes, has recognized the value of Hanmi's Quantum Project," said Dr. Gwan Sun Lee, CEO/President of Hanmi Pharmaceutical. "We are confident that we have found the right partner and are excited for the potential this license agreement with Sanofi will bring to the development of Hanmi's Quantum Project and possibilities this could offer to people with diabetes

Less than a week after the announcement of the deal with Sanofi, Hanmi thrilled investors again on Nov 9 with news that it will partner with Janssen Pharmaceuticals to develop a novel biologic for treatment of diabetes and obesity. The collaboration could generate up to $915 million for Hanmi.

Janssen agreed to obtain exclusive worldwide rights—except for Korea and China—to develop and commercialize Hanmi’s Phase II-ready diabetes and obesity candidate HM12525A and other oxyntomodulin-based therapies

In return, Janssen agreed to pay Hanmi $105 million upfront, and up to $810 million in payments tied to achieving potential clinical development, regulatory, and sales milestones. Hanmi would also be eligible for tiered double-digit royalty payments if HM12525A is successfully commercialized.

Earlier this year, Hanmi signed agreements initiating an up-to-$730 million-plus alliance with Boehringer Ingelheim to develop the Phase II HM61713 for EGFR mutation-positive lung cancer; and an up-to-$690 million collaboration with Eli Lilly to develop Hanmi’s Phase I compound HM71224 for autoimmune and other diseases.

In May last year, Hanmi Pharmaceutical entered an agreement with U.S. pharmaceutical giant Eli Lilly to license the Korean company’s drug to fight autoimmune diseases in a deal estimated to be worth $690 million.

The agreement gives Eli Lilly the rights to develop the inhibitor HM71224, which is used to treat autoimmune diseases such as rheumatoid arthritis and other diseases that attack the immune system and destroy healthy tissue.

The U.S. company will be responsible for developing, licensing and commercializing the drug except for in Korea and China. Eli Lilly will pay $50 million up front and will make periodic payments amounting to $640 million based on the successful completion of each stage of clinical testing.

By Alex Lee
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