LegoChem, riding ADC sugar rush, raises $411M from confectionery company
LegoChem Bioscience, fresh from fattening up on Johnson & Johnson’s cash, has found a way to feed its growing sweet tooth. Responding to the antibody-drug conjugate (ADC) sugar rush, the Korean biotech has secured 548.5 billion South Korean won ($411 million) from confectionery company Orion to support the expansion of its R&D pipeline.
Two years ago, LegoChem set itself the goal of discovering two drug candidates a year and starting five phase 1 clinical trials within five years. The ADC market has changed quickly since then, with the success of AstraZeneca and Daiichi Sankyo’s Enhertu inspiring companies to throw money at the modality. Facing intensifying competition, LegoChem has increased its R&D activity targets by 100% to 150%.
Orion is supporting the scaled-up R&D strategy. The Korean company made its name in confectionery but has diversified its operation in recent years, establishing biotech as one of its three growth drivers through a deal with Shandong Lukang Pharmaceutical and a dental disease pact.
After reportedly showing interest in Alteogen, Orion has made LegoChem the next piece of its biotech expansion puzzle. The confectionery company has struck a deal to acquire around 25% of LegoChem in a deal that will make it the biotech’s largest shareholder.
The investment supports LegoChem’s plan to invest 1 billion won ($747,000) in R&D over the next five years. With 220 billion won ($160 million) to its name, and ambitions to add hundreds of billions more through deals, LegoChem identified a 500 billion won ($370 million) gap shortfall. Orion has filled the shortfall and positioned the biotech to step up its R&D activities.
LegoChem will use the cash to advance a pipeline headed up by clinical candidates against popular ADC targets. The pipeline is led by an ADC directed at HER2, the target of Enhertu, and includes a rival, now partnered with J&J, to Gilead’s TROP2 product Trodelvy. LegoChem is also going after ROR1—a target of interest to Boehringer Ingelheim and Merck & Co—CD19 and DLK1.