Yuhan Corporation is strengthening its open innovation by expanding investments in biotech companies and research institutes with different areas of focus. Using their financial resources to the full extent, the company has prepared its future growth engine by investing nearly 224 million dollars over six years. In 2020, Yuhan made a strategic investment of over 45 million dollars in 7 domestic biotech companies. The industry interprets this phenomenon as Yuhan leaping forward as a global leader pursuing the novel drug development company.
According to Korea’s Financial Supervisory Service, Yuhan invested 10 billion won worth of funds in 3 unlisted companies in the fourth quarter of last year. In December 2020, the company invested 2.7 million dollars and 1.8 million dollars respectively to 2 biotech startups – AprilBio and CellBion-, and 4.5 million dollars to Genome Opinion, a Diagnostics company.
By investing 2.7 million dollars in AprilBio, Yuhan acquired 69,546 shares of the company. As of December 2020, Yuhan’s shareholding percentages of April Bio was 4.9%, making them the second-largest shareholder.
April Bio develops long-acting Biologics and new antibody drugs based on SAFA (anti-Serum Albumin Fab-Associated) technology and antibody library. SAFA is a platform technology that utilizes antibody fragments that specifically bind to serum albumin to increase the half-life of recombinant proteins and develop recombinant antibody drugs. At the beginning of this year, Yuhan also signed a business agreement MOU with April Bio to establish a strategic research partnership as well. Yuhan is planning to strengthen its ability to develop new antibody drugs through collaborative research with April Bio using their proprietary platform technology.
April Bio has selected NH Investment & Securities as the organizer and is preparing for a special listing on KOSDAQ. If April Bio is listed on the KOSDAQ market within this year, Yuhan is expected to benefit from the increase in its equity value.
Yuhan also built a great business relationship with CellBion, a new drug development company. Yuhan invested 1.8 million dollars through a paid-in capital increase method allocated to a third party and secured a 2.1% stake in CellBion (185,185 common stocks).
Cellbion is a biotech startup developing intravascular inflammation drugs, prostate cancer diagnosis and treatment drugs, and contrast agents for image-guided surgery through cooperation with leading domestic university hospitals, such as Seoul National University Hospital. They have a facility to manufacture clinical trial drugs and radiopharmaceuticals in Seoul. Yuhan signed an MOU with CellBion that gives them priority to review the diagnostic drug (PSMA-N-GUL) and therapeutic drug (PSMA-D GUL) targeting the prostate-specific membrane antigen (PSMA) among the five novel drug pipelines of CellBion.
In December 2017, CellBion received approval for injectable drug manufacturing and quality control (GMP) from the Ministry of Food and Drug Safety (formerly known as Korean FDA) and started producing the aforementioned drugs in earnest after in-licensing radiopharmaceutical-related technology from Dong-A ST in 2019. CellBion is planning its KOSDAQ listing next year to finance its clinical trials.
Yuhan also invested 4.5 million dollars in Genome Opinion, a molecular diagnostics company, and obtained 45,440 shares (14.3% stake). Genome Opinion is an R&D company that analyzes the risk of various diseases through molecular diagnosis. It aims to provide an optimal test to guide cancer, target anti-cancer drug, and immunotherapy for each patient, using the Analysis information from the genomic information from patient’s cancer. Through this investment, Yuhan was able to lay the foundation to expand its research area to the field of early screening and genomic data.
In recent years, Yuhan Corporation has been aggressively investing in domestic biotech companies. In 2015 alone, they invested 76 million dollars in four KOSDAQ-listed companies, including Bioneer, Cos-On, Genexine, and EM Tech. Over the 6 years period, they invested a total of 224 million dollars in biotech companies (34 million in 2016, 13 million dollars in 2017, 27 million in 2018, 28 million in 2019, and 36 million in 2020). It is part of Yuhan’s open innovation strategy to maximize their ability to develop new drugs in a short period of time. During this period, Yuhan Corporation’s accumulated investment in their own R&D programs amounted to 6.4 billion dollars. R&D investment ratio increased from 5.7% in 2014 to 14.2% in 6 years. The number of innovative drug pipelines increased from 14 at the beginning of 2015 to 30 at the end of 2020. Half of these are external collaborative research projects through open innovation.
The active R&D open innovation strategy of Yuhan is bringing the hard work to full fruition. Since 2018, Yuhan has signed 4 license-out deals with global pharmaceuticals – Spine Biopharma, Janssen Biotech, Gilead Sciences, and Boehringer Ingelheim. Over the past two years, the revenue from those deals amounted to 168 million dollars.
Yuhan’s product sales last year amounted to 7.9 million dollars, which is an increase of 8.3% compared to the previous year, however, the percentage of product sales in total revenue (1.4 billion dollars in 2020) has decreased to 53.8%, which is the lowest in 8 years since 52.2% in 2012.
Yuhan’s revenue from license-out deals including the milestone payments was 140 million dollars in 2020, which is seven times greater than 21 million dollars from 2019 and takes up 10% of the company’s total revenue of 2020. Last year, the development of two new drugs licensed out to two global pharmaceutical companies – Janssen and Boehringer Ingelheim – resulted in large milestone fees.
In April of last year, Yuhan received a milestone payment of 35 million dollars (43 billion won) from Janssen for the development of Lazertinib. In November, they received an additional $65 million (723 billion won) when Janssen started recruiting subjects for phase 3 clinical trials of Amivantamab + Lazertinib combination therapy. Yuhan has earned a total of 100 million dollars (115.3 billion won) within a year from the license-out deal of Lazertinib alone.
Also, in April 2020, Yuhan received $10 million (12.3 billion won) from Boehringer Ingelheim after the completion of preclinical toxicity studies for its non-alcoholic steatohepatitis (NASH) treatment. NASH treatment is a field with high unmet needs in medicine as there is no approved drug yet, and the industry predicts that this new drug candidate has a great prospect.
In addition to Lazertinib and the NASH treatment, various drug candidates from Yuhan’s pipeline are expected to move forward with their phase 1 clinical trials soon, including the COVID-19 treatment ‘YH35361’, NASH drug ‘YH25724’, Chronic Urticaria treatment ‘YH35324’, and Immunotherapy ‘YH32367’.
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