LG Chem (CEO Shin Hak-cheol) is acquiring AVEO Pharmaceuticals, a company that develops anticancer drugs that have new drugs approved by the US Food and Drug Administration (FDA).
A company official said on the 18th, “This is the first time for a Korean company to acquire a company with FDA-approved new drugs.” .
Aveo, established in 2002 in Boston, Massachusetts, USA, is a company specialized in the anticancer market such as clinical development, licensing, sales, and marketing. It was listed on the Nasdaq in 2010 and has continued to grow every quarter after obtaining US FDA approval for FOTIVDA, a treatment for kidney cancer, in 2021.
LG Chem’s position is that through this acquisition, it will secure the ability to commercialize cancer in the United States in a short period of time and prepare a bridgehead to launch new drugs developed in-house in the United States, the world’s largest market.
A company official said, “In the United States, insurance, drug price system, and distribution structure are operated differently from those in Korea, so local-specific commercialization capabilities are required from the stage of new drug development. LG Chem has decided to acquire Aveo, which has successfully entered the commercialization stage, as it is possible to operate a business even as a sales organization centered on medical institutions.”
According to the consensus of US securities companies, Aveo’s sales this year are expected to reach 150 billion won, a nearly three-fold increase from the previous year, and sales of 500 billion won in 2027 are expected. Additional sales growth is expected as the scope of application of the treatment will be expanded when the ongoing clinical trial of Potibda and immunotherapy succeeds.
In this M&A, LG Chem will use its assets to invest in the ‘LG Chem Life Science Innovation Center (LG CBL)’, a life science subsidiary in Boston, USA, and then LG CBL will establish a special purpose corporation (SPC). It will be newly established and will proceed with the merger and acquisition of Aveo.
In the future, procedures such as approval by a majority of Aveo’s general shareholders’ meeting and deliberation by the Foreign Investment Deliberation Committee will proceed.
Meanwhile, the FDA-approved anticancer drug Potivida, sold by Aveo, obtained Category 1 Recommendation from the NCCN Guideline in August this year. In addition to this drug, Aveo has secured three anticancer pipelines in the clinical development stage, including Ficlatuzumab, a head and neck cancer treatment that is undergoing phase 3 clinical trials.
LG Chem also has a total of 20 new drug pipelines in the development stage (preclinical and clinical), including nine anticancer pipelines, including solid cancer cell therapy, and treatment for gout, NASH, and obesity.
The company claims that it will achieve about 2 trillion won in sales in the life sciences sector by 2027 by internalizing Aveo’s commercialization and clinical capabilities.
Shin Hak-cheol, Vice Chairman of LG Chem, said, “The decision to take over is the most important milestone in the 40-year history of LG Chem’s bio business and lays the foundation for this business to take off globally.” “We will accelerate our leap forward as a global innovative pharmaceutical company by further enhancing our clinical and licensing capabilities in the US, focusing on oncology,” he said.