[News Inside Business] What Kind of Company Is Aveo, the US Firm Acquired by LG Chem?

Key Information about the U.S. Pharmaceutical Company Aveo

LG Chem successfully closed a merger and acquisition (M&A) deal worth 800 billion KRW to acquire the U.S. company Aveo Pharmaceuticals, a bio-venture firm celebrating its 20th anniversary this year and listed on the U.S. Nasdaq stock market in 2010. Aveo is well-known for developing FDA-approved anticancer drugs.

On the 18th, LG Chem announced that it would acquire 100% of Aveo's shares for $566 million (approximately 800 billion KRW). The M&A will proceed after obtaining majority approval at Aveo’s shareholders' meeting and review by the Foreign Investment Committee, with LG Chem expecting the merger to take about 3 to 6 months to complete.

Aveo’s strength lies in its competitive pipeline of commercialized new drugs. A representative drug developed by Aveo is 'Tivozanib,' a vascular endothelial growth factor (VEGF) inhibitor. After submitting for FDA approval in 2012, it finally received approval in March last year following years of effort.

Tivozanib is currently used as a next-generation treatment for renal cell carcinoma under the brand name 'Fotivda.' It was already approved and commercialized in Europe and the UK in 2017. Fotivda has demonstrated superior performance compared to 'Nexavar' (active ingredient sorafenib), which was the market leader in liver cancer treatment, and is expected to be a 'game changer' in the anticancer drug field.

In a Phase 3 clinical trial conducted before the final FDA approval, 350 patients with renal cell carcinoma were treated with Fotivda and Nexavar to track long-term treatment effects. The progression-free survival (PFS) period?time during which the disease does not worsen after taking the drug?was about five times longer for Fotivda compared to Nexavar.

Current status of the clinical trial for the combination therapy of Aveo's Fortive. Collaborating with major pharmaceutical companies such as Bristol-Myers Squibb and AstraZeneca. / Source=Aveo official website

As a result, big pharma companies, major players in the existing anticancer drug market, have also shown interest in Aveo. AstraZeneca is researching the possibility of liver cancer treatment by combining its immuno-oncology drug Imfinzi with Fotivda, and Bristol-Myers Squibb (BMS) has formed a partnership to evaluate combination therapy of its immune checkpoint inhibitor Opdivo with Fotivda for kidney cancer treatment. When combined with drugs that have already accumulated sales in the trillions of KRW, additional revenue can be expected.

Aveo recorded sales of $42.3 million (approximately 60.3 billion KRW) last year. Sales are projected to reach 150 billion KRW this year and about 500 billion KRW in five years. In addition to Fotivda, Aveo holds three more new drug candidates in clinical stages.

Meanwhile, by acquiring Aveo, which has strong competitiveness in anticancer drug research, LG Chem is expected to accelerate its global pharmaceutical market expansion. LG Chem’s life sciences business division recorded sales of only 760 billion KRW last year, but combined with Aveo, sales are expected to exceed 1 trillion KRW within a few years.

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