[Asia Economy Reporter Hyungsoo Park] Youngjin Pharm is showing strong performance. The news that the mitochondrial disease treatment candidate substance KL1333 received approval for the Phase 2/3 clinical trial Investigational New Drug (IND) application from the U.S. Food and Drug Administration (FDA) appears to have influenced the stock price.
As of 11 a.m. on the 7th, Youngjin Pharm is trading at 5,180 KRW, up 20.19% from the previous day.
Youngjin Pharm announced that KL1333, a mitochondrial disease treatment candidate substance licensed to the Swedish biotech venture company Abliva AB (formerly NeuroVive, hereafter Abliva) in 2017, received FDA approval for simultaneous Phase 2/3 IND on the 24th of last month. If the Phase 2/3 clinical trials are successfully completed and the drug is launched, KL1333 will become the world's first innovative drug (First in class) for the treatment of primary severe mitochondrial diseases.
KL1333 is a new drug substance independently developed by KT&G Life Sciences, which was absorbed and merged by Youngjin Pharm in January 2017, as a metabolic and intractable disease treatment since 2013, and was licensed to Abliva in April 2017. It was designated as an orphan drug by the U.S. FDA and the European Medicines Agency (EMA) in 2018.
Abliva successfully completed the UK Phase 1a/b trial in May. They plan to develop it as a treatment for rare mitochondrial diseases with high market growth potential due to the lack of existing therapies.
Abliva is conducting Phase 2/3 clinical trials targeting adult patients with primary mitochondrial disease (PMD), planning to start patient recruitment next year and complete the trial in 2024. The clinical trials will be conducted at 30 to 40 hospitals across 7 to 12 countries, including the United States. Patients participating in the trial will orally take either a placebo or KL1333 for a total of 12 months.
In the previous Phase 1a/b trial conducted by Abliva, the safety of KL1333 was confirmed in healthy adults. Since KL1333 showed improvement in fatigue symptoms and muscle function in a small number of primary mitochondrial disease (PMD) patients, the likelihood of success in Phase 2/3 trials appears even higher.
At the time of the technology transfer of KL1333, the contract size was $57 million (approximately 62.7 billion KRW), and Youngjin Pharm has received $2 million (approximately 2.3 billion KRW) as an upfront payment. With the FDA approval of the Phase 2/3 IND, clinical milestones will be received stepwise. If the Phase 2/3 trials succeed, the clinical milestone amount (totaling $12 million) is expected to increase further.
If the new drug is approved and commercialized successfully, royalty income is expected, and there will be opportunities to develop various indications. Youngjin Pharm holds the distribution rights for Korea and Japan, so additional technology transfers could increase Youngjin Pharm's revenue.
Primary mitochondrial disease (PMD) is currently an unmet needs market worldwide with no available treatments. There are approximately 40,000 mitochondrial patients in the U.S. and Europe, and the global adult prevalence of mitochondrial diseases is estimated at 2.9 per 100,000 people (source: Prevalence of Nuclear and Mitochondrial DNA Mutations Related to Adult Mitochondrial Disease, 2015-05). Abliva projects annual sales exceeding $1 billion (approximately 1.1 trillion KRW) considering the target patient population.
In addition to mitochondrial diseases, Youngjin Pharm signed a joint research agreement with Qurom Bioscience in July to strengthen its pipeline in various rare disease areas such as inflammation, fibrosis, and neurodegenerative diseases. Both companies possess foundational mitochondrial-based technologies and patents, and by integrating their specialized technologies and know-how, they aim to focus research capabilities on developing treatments for rare intractable diseases through synergy.
Lee Jae-jun, CEO of Youngjin Pharm, stated, "We will maintain a collaborative relationship and actively cooperate to ensure Abliva completes the global Phase 2/3 clinical trials, and strengthen our innovative drug portfolio through indication expansion." He added, "Based on these achievements, Youngjin Pharm will continue to expand cooperative research with research institutes and biotech ventures to become a specialized pharmaceutical company in innovative drug R&D not only for mitochondrial rare diseases but also more broadly, solidifying our position as a leading company."
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