LG Chem targets becoming top 20 oncology company
In January 2022, LG Chem acquired Aveo Oncology for $571m (€539m), with Shin Hak-Cheol, CEO of LG Chem, stating that the move was part of a strategy to become a leading oncology company.
LG Chem announced the strategy for which it plans to achieve this, by providing Aveo with $300m of investment and having plans to invest more than $1.5bn in its overall life sciences division over the next five years. The aim is for Aveo to become one of the top 20 companies in the oncology market by 2028.
At present, Aveo has one commercial product, in the form of Fotivda (tivozanib), which is a treatment for advanced kidney cancer.
The company is also exploring developing the treatment for additional cancer indications, including hepatocellular carcinoma, and tumors that are resistant to immunotherapy, or immunologically cold tumors, in combination with immune checkpoint inhibitors.
The treatment earned Aveo $30.2m in third quarter 2022 results, despite which the company still posted a net loss for the period of $3.3m. LG Chem stated that it expects sales of the product to rise to $170m this year, and to over $300m by 2027.
According to LG Chem, Aveo is currently conducting the clinical development of three new drug candidates. One phase 3 study is looking to expand the indication of Fotivda, as well as progressing a treatment for head and neck cancer, and a treatment for cachexia, a nutritional disorder in cancer patients.
LG Chem will also transfer ‘promising anti-cancer candidates’ from its life sciences division to Aveo, which will then take on late-stage clinical development and commercialization in the US market. The LG Chem Life Sciences division will be positioned to pursue pre-clinical and early clinical trials, before transferring development to Aveo.
In February this year, LG Chem announced that it was building a pharmaceutical plant specifically designed for clinical trials, to speed up medicine development by directly handling drug candidate testing.
The facility measures 7,220-square-meters and is based in Osong, South Korea, and will cost the company $50m. According to LG Chem, it will be operational as early as April this year, upon receiving US Food and Drug Administration (FDA) approval.
As part of its strategy to expand its biopharma capabilities, LG Chem stated that it had been pursuing M&A in pharma and biotech companies since 2019. The company outlined that due to Aveo recently launching Fotivda and the fact it was “on the verge of breaking out,” the Korean company selected the Boston, US-based pharma company.