[BioUSA] Big Pharma Focuses on Early-Stage Materials and Companies... Korea Also Expected to Benefit

'Risky but Cheap and Creating Greater Value'
Big Pharma Companies Rush to Procure Early-Stage Materials
Genome&Company Achieves Export Success at Preclinical Stage

Also Actively Supporting Early Companies
J&J, Lilly... Showing Interest in Korea

The BIO International Convention (BIO USA), held in San Diego, California, USA, concluded on the 6th (local time). At this year's BIO USA, the world's largest bio and pharmaceutical expo, the trend centered around global big pharma was 'early-stage technology pre-acquisition.' Due to the impact of US-China security conflicts, it is expected that the export of technology from Chinese biotechs, which supplied promising pipelines (pharmaceutical assets under development) to US big pharma, will be restricted. As a result, big pharma sought to secure early-stage new drug candidates and developers from other countries capable of providing stable technology supply. South Korea also benefited from this trend.

Active meetings are taking place in the partnering space set up at the San Diego Convention Center in California, USA, where the BIO International Convention (BIO USA) is being held. In the background, large partnering booths set up by big pharma companies such as Eli Lilly and Sanofi are located.
[Photo by Lee Chunhee]

The main stage of BIO USA is the exhibition booths, but these are more like shops set up by pharmaceutical and biotech companies from various countries aiming to attract global big pharma as clients. Large booths set up by big pharma such as Johnson & Johnson (J&J), Novo Nordisk, Eli Lilly, and Sanofi served as partnering venues. Big pharma toured the 'shops' of smaller companies and invited those of interest to their own 'partnering booths' to negotiate technology acquisition and find new partners.

The change big pharma showed at this year's BIO USA was focusing on finding early-stage research and development materials rather than late-stage pipelines that are close to commercialization. Over the past 2-3 years, big pharma concentrated on acquiring new drug candidates after completing Phase 2 clinical trials to reduce investment risk, but at this BIO USA, they showed interest in relatively inexpensive preclinical to Phase 1 stage pipelines.

Nauman Shah, Global Head of Business Development (BD) at J&J Innovative Medicines, recently stated about the technology transaction situation, "Many deals for late-stage development materials were completed last year, and this year we are looking for more value creation opportunities in early to mid-stage material transactions." John McDonald, Global Head of BD and Mergers & Acquisitions (M&A) at Novo Nordisk, also said in a session themed 'Healthy Returns' that "early-stage materials could bring better returns than late-stage ones," adding, "We will supplement the next-stage pipeline following Wegovy, a blockbuster obesity treatment."

Domestic biotech Genome & Company rode this trend and licensed out the preclinical stage anticancer drug candidate GENA-111 to Swiss company DivBioPharm for an upfront payment of $5 million (approximately 6.9 billion KRW) and a total of $426 million (approximately 586.4 billion KRW). CEO Hong Yoo-seok of Genome & Company explained, "Based on excellent research and development capabilities, we were able to achieve meaningful results despite being at an early preclinical stage."

The trend of big pharma proactively acquiring promising early-stage materials had already influenced domestic biotechs before this BIO USA. Nexeye licensed out the preclinical stage anticancer drug candidate NXI-101 to Japan's Ono Pharmaceutical in April. Orum Therapeutics exported the antibody-drug conjugate (ADC) candidate ORM-6151 to Bristol-Myers Squibb (BMS) last year when it was entering Phase 1 clinical trials.

Big pharma is not only acquiring new drug candidates but also providing direct support to early-stage companies. This also has a ripple effect on our pharmaceutical and biotech industry. J&J's startup incubation program, JLABS, established a branch in Korea earlier this year. Melinda Richter, Global Head of JLABS, attended this BIO USA and said, "Korea has strengths in various fields such as small molecules and antibody therapeutics," adding, "We will collaborate across borders (with biotechs in Korea and others) to mature the pharmaceutical and biotech ecosystem." Aliza Apple, Chief Operating Officer (COO) of Eli Lilly's Lilly Gateway Labs, personally visited the Korean pavilion at BIO USA and suggested the possibility of establishing a Korean branch by saying, "We hope Korean biotechs will take interest in the new facility to be established next year."