Finnish drugmaker Orion Corp has taken a 25% in South Korean biotech LegoChem Bioscience, becoming its largest shareholder, as it continues a refocusing of the company.
Orion is paying 549 billion won ($415 million) for the stake in the company, which has seen growing interest in its drug discovery engine, which spans small-molecule and antibody-drug conjugate (ADC) drugs and focuses mainly on cancer, and fibrotic and infectious diseases.
Just last month, Johnson & Johnson forked out almost $100 million upfront as part of a $1.7 billion licensing deal for LegoChem’s LCB84, a Trop2-targeting ADC in phase 1/2 clinical testing that has potential across various solid tumour and blood cancers.
The ADC platform has also attracted a string of partnerships from the likes of Takeda, Amgen, Iksuda Therapeutics, and Fosun Pharma, amongst others.
Orion recently narrowed its R&D focus to cancer and pain as part of a revamp of the business in 2022, taking the decision to gradually phase out research into central nervous system diseases, which have been a focus of the company for decades.
Another core R&D area – respiratory products – was also dropped, with the exception of an inhaled formulation of tiotropium for chronic obstructive pulmonary disease (COPD), which subsequently failed clinical testing and was abandoned later the same year.
Taking a stake in LegoChem gives Orion a position in ADCs, which have emerged as sought-after assets in oncology, as well as autoimmune diseases, in the last couple of years and prompted a string of major M&A and partnering transactions that show little signs of letting up. Just this month, Johnson & Johnson continued a run of recent big-ticket deals with a $2 billion play for California ADC specialist Ambrx.
LegoChem’s chief executive, Yongju Kim, said that. amid the ADC boom, the company’s platform – which features a unique linker molecule and toxin – is poised to deliver 10 clinical candidates within the next five years, but needs around 1 trillion won ($757 million) to be invested in R&D.
“I became convinced that Orion was the optimal strategic partner” for that effort, wrote Kim in a letter to shareholders, adding that the Finnish drugmaker “had the goal of finding a new growth engine through entry into the biotechnology industry and chose our company as the target.”
He added: “Orion has shown deep trust in the path that LegoChem […] has taken over the past 18 years, and has shown a firm will to support and work together as a family as the management, including myself, pursues more active R&D.”
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