LG Chem Completes Acquisition of Aveo, Secures FDA-Approved Anticancer Drug

Secured Kidney Cancer Chemotherapy Drug 'Fortibda'
Annual Sales Expected to Grow to 450 Billion KRW

LG Chem Presents Vision as 'Global Top 30 Pharmaceutical Company'
Achieving 2 Trillion KRW Investment and 2 Trillion KRW Sales by 2027

Vice Chairman Shin Hak-cheol of LG Chem (fourth from the left in the front row), Michael Bailey, CEO of Aveo (fifth from the left in the front row), Son Ji-woong, President of LG Chem Life Sciences Division (far left in the front row), and other executives and employees of LG Chem and Aveo are posing for a commemorative photo.
[Photo by LG Chem]

[Asia Economy Reporter Chunhee Lee] LG Chem has completed the acquisition and merger (M&A) of the U.S. oncology biotech AVEO Pharmaceuticals and aims to become a global top 30 pharmaceutical company focused on oncology.

LG Chem announced on the 19th that it plans to finalize the M&A on the 20th, following its investment of $571 million (approximately 707 billion KRW) on the 18th into LG Chem Global Innovation Center (LG CBL), its life sciences subsidiary based in Boston, U.S., to acquire AVEO. This merger involves LG Chem investing acquisition funds into LG CBL, which then establishes a special purpose company (SPC) to acquire AVEO. Regarding the acquisition, LG Chem has been steadily completing related procedures since receiving approval for the Hart-Scott-Rodino Antitrust Improvements Act (HSR filing) in the U.S. last December, followed by AVEO’s shareholder meeting on the 5th and approval from the Committee on Foreign Investment in the United States (CFIUS) on the 17th.

As a result, AVEO will be incorporated as a subsidiary of LG Chem and will continue to operate independently based on its own oncology business capabilities in the U.S. AVEO, founded in Boston in 2002 as an oncology-focused biotech, was listed on NASDAQ in 2010. Its main product is the FDA-approved oncology drug FOTIVDA. FOTIVDA received FDA approval in 2021 as a third-line treatment for adult advanced renal cell carcinoma (RCC). It generated $39 million (approximately 48.3 billion KRW) in sales in 2021 and is expected to grow continuously, with sales projected to reach about 450 billion KRW by 2027.

AVEO’s performance also surpassed 130 billion KRW in sales in 2021, and its sales last year are estimated to have grown by more than 60% year-over-year to 210 billion KRW. In addition, AVEO is conducting additional clinical trials to expand the usage of FOTIVDA, including combination trials with Opdivo and Imfinzi, and is also working on follow-up oncology drug development, such as the Phase 3 clinical trial of the head and neck cancer treatment Piclatazumab.

LG Chem and Aveo logos (from left)
[Photo by LG Chem]

Through the acquisition of AVEO, LG Chem plans to enhance its business competitiveness in the U.S., the world’s largest oncology market, and grow into a global pharmaceutical company in the oncology field. For this, LG Chem intends to transfer the oncology drug pipeline developed by its Life Sciences Division to AVEO in the mid to long term to accelerate the commercialization of oncology drugs in the U.S. Currently, cell therapies and immune checkpoint inhibitors are being developed in-house at the preclinical stage.

Under this strategy, the Life Sciences Division, which has strengths in early research and production process development, will be responsible for discovering promising oncology substances, preclinical and early clinical trials, and commercialization process development. Meanwhile, AVEO, with its clinical development and sales expertise in the U.S. market, will handle late-stage clinical development and commercialization of the oncology pipeline. Particularly, the acquisition of AVEO will also serve as a stepping stone to establish a direct sales network in the U.S. An LG Chem official explained, “About half of AVEO’s total employees are in sales,” adding, “They already have considerable sales capabilities in the U.S. related to kidney cancer.” Going forward, LG Chem plans to further expand its sales force in line with the U.S. launch of newly developed drugs.

LG Chem will also embark on full-scale bio investments following the AVEO acquisition. From this year through 2027, it plans to invest a total of 2 trillion KRW in bio research and development (R&D) and aims to launch more than four new drugs globally in the oncology and metabolic disease fields by 2030. By expanding sales in existing businesses such as diabetes, vaccines, growth hormones, and oncology drugs, LG Chem targets 2 trillion KRW in sales by 2027. After 2030, when sales of newly developed drugs begin in earnest, it plans to generate annual sales growth of several hundred billion KRW.

Shin Hak-cheol, Vice Chairman of LG Chem, said, “This M&A brings us one step closer to realizing our vision of providing a better life for humanity through science and innovation.” He added, “We will focus on nurturing AVEO as a future bio hub leading the pioneering and growth of our oncology business and maximize integration synergies to leap forward as a ‘global top 30 pharmaceutical company centered on oncology.’” Michael Bailey, CEO of AVEO, also stated, “This merger has made AVEO’s vision of ‘improving the lives of cancer patients’ more tangible,” and “By combining the strengths of both companies, we will strengthen our pipeline foundation and continuously launch new drugs to grow to a higher level.”

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