"Tech Export Jackpot" Pharmaceutical Bio Aims for a Turnaround in the Second Half

Boronoie·Dong-A ST, etc.
Contracts that stalled in the first half resume one after another
Overseas face-to-face conferences and exhibitions held
Expectations for additional technology exports

[Asia Economy Reporter Lee Gwan-joo] The domestic pharmaceutical and bio industry, which had stalled in the first half of the year due to the Omicron variant pandemic, is seeking a turnaround in technology exports in the second half. Following recent consecutive contracts by Voronoi and Dong-A ST, and with overseas in-person conferences and exhibitions taking place, there is growing anticipation for additional technology exports.

Technology Exports Kick Off in the Second Half

According to the pharmaceutical and bio industry on the 16th, Voronoi signed a technology export contract for an oral phosphatase inhibitor with the U.S. company Metis Therapeutics on the 13th. Under this contract, Voronoi will transfer the oral phosphatase inhibitor for treating solid tumors such as lung cancer, melanoma, and colorectal cancer to Metis. Phosphatase inhibitors are drugs that treat cancer by inhibiting phosphatases involved in cell cycle regulation, inducing somatic cell division defects during cancer cell growth. The total contract amount is up to $482.2 million (approximately 680 billion KRW), with an upfront payment of $1.7 million (about 2.4 billion KRW). The remaining amount will be received as milestone payments based on development achievements. Royalties will also be paid upon successful commercialization. This technology export is Voronoi's first contract since its listing on the KOSDAQ market in June. Including this contract, Voronoi has signed a total of five technology export contracts since 2020. The amount received from global milestones alone has exceeded 2 trillion KRW.

Following that, on the 14th, Dong-A ST signed a technology export contract worth up to $316 million (approximately 440 billion KRW) with the U.S. company Neuropharmaceuticals. Under the contract, Dong-A ST will transfer the exclusive global development rights and exclusive global sales rights outside Korea for the type 2 diabetes and non-alcoholic steatohepatitis (NASH) treatment ‘DA-1241’ and the obesity and NASH treatment ‘DA-1726’ to Neuropharmaceuticals. The contract payment is $22 million (about 30.7 billion KRW), and development milestones can be received upon achieving product approvals, etc. After commercialization, tiered commercial milestones (undisclosed) will also be paid based on cumulative net sales. Both new drugs exported under this contract are being developed as ‘first-in-class’ innovative drugs. DA-1241 activates ‘GPR119’ present on cell membranes of the intestine and pancreas, exerting effects such as blood sugar reduction, pancreatic beta-cell protection, and lipid metabolism improvement. Clinical significance was confirmed in a U.S. Phase 1b trial, and a global Phase 2 trial is underway. DA-1726 is an obesity treatment in the oxyntomodulin analog class, and its preclinical results were presented as a poster at the American Diabetes Association meeting in June, attracting attention.

Will ESMO and Others Lay Golden Eggs?

In the industry, the time taken from discovering a new drug candidate to the final approval stage is generally considered to be 10 years. This period inevitably requires enormous time and cost.

Technology export serves as a breakthrough channel to drastically reduce this burden. It involves transferring rights to new drug candidates mid-development and receiving compensation for potential value and development profits in the market. If a company has the technology, it can earn profits in the trillions of KRW, far beyond billions, making technology export known as a ‘goose that lays golden eggs.’ Especially, it externally recognizes the company’s technological capabilities, acting as a future growth engine.

The development of the pharmaceutical and bio industry has led to an increase in technology exports. According to the Korea Pharmaceutical and Bio-Pharma Manufacturers Association, the number of technology exports by domestic companies more than doubled from 14 cases in 2020 to 33 cases last year. In particular, last year’s total contract value reached 13 trillion KRW (excluding undisclosed amounts), demonstrating the competitiveness of Korean new drugs in the global market. However, in the first half of this year (January to June), there were only seven cases. This is analyzed to be due to the global pandemic of the COVID-19 Omicron variant early this year, which prevented major overseas conferences and exhibitions that serve as channels for technology exports from being held. In the second half, with events such as the European Society for Medical Oncology (ESMO) and related conferences and exhibitions taking place, discussions on technology exports are expected to become more active.

An industry official said, "Since many technology export contracts are not small in scale, there are limits to discussing them only through non-face-to-face means. With large-scale conferences scheduled to be held in person in the second half and active participation from domestic companies, we expect good results," he said.

This content was produced with the assistance of AI translation services.