LG Chem has expanded its licensing agreement for a rare obesity treatment with a U.S. pharmaceutical company from approximately 400 billion won to over 1 trillion won, reaffirming the commercial value of the new drug as it approaches global Phase 3 clinical trials.
On November 3, LG Chem announced that it has increased the scale of its licensing agreement for the rare obesity drug 'Vibamelagon' with the U.S. rare disease-focused biotech firm Rhythm Pharmaceuticals from $305 million to $855 million (approximately 1.15 trillion won). This adjustment reflects the drug's development value and commercialization potential, following positive results from Phase 2 trials and the upcoming entry into global Phase 3 trials.
Vibamelagon is a new drug substance developed by LG Chem. The company licensed it to Rhythm in January 2024 during Phase 1 trials, and it is currently being developed for the treatment of rare obesity, including hypothalamic obesity.
Rhythm has conducted Phase 2 trials for Vibamelagon targeting patients with hypothalamic obesity and has reported positive results. The company is preparing to enter global Phase 3 trials by the end of the year.
Vibamelagon acts as an MC4R (melanocortin 4 receptor) agonist. MC4R is a receptor in the brain's hypothalamus that regulates appetite and energy balance; activating it can enhance feelings of fullness and suppress excessive appetite.
Through this contract revision, the total agreement size has been expanded to $855 million, and the sales royalty structure has been simplified. LG Chem is set to receive an additional upfront payment of $350 million (approximately 470 billion won) over the next four years.
The two companies have agreed that a portion of the upfront payment can be converted into royalties annually. Additionally, the criteria for achieving development, approval, and sales milestones have been relaxed to increase the likelihood of revenue generation, with milestone amounts increased by $200 million compared to the previous agreement.
LG Chem explained that this contract expansion reflects the clinical results of Vibamelagon and its potential as a treatment for rare obesity. New drugs for rare diseases face significant development risks due to the small patient population, but they can achieve high market value if successful in gaining approval and commercialization due to the lack of treatment options.
Son Ji-woong, head of LG Chem's Life Sciences Division, stated, "This contract reflects both parties' confidence in the value and potential of Vibamelagon. We expect that through global development expansion, innovative treatment options will be provided to patients with rare obesity as soon as possible."
* This article has been translated by AI.
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