GC-Yuhan Orphan Alliance Signals Changing Korean Views On Open Innovation
Executive Summary
In what appears to be the first open innovation-based partnership between leading South Korean pharma firms, GC Pharma and Yuhan have agreed to conduct joint early research on orphan drugs, capitalizing on each others' strengths. The move may herald a shift in domestic companies' views on such collaboration and a possible increase in similar tie-ups, amid their ongoing efforts to pursue innovation.
GC Pharma and Yuhan Corp. have agreed to join hands to develop orphan drugs for Gaucher's disease and potentially other indications, in a rare cooperative move by leading South Korean pharma firms that have so far largely sought open innovation arrangements with smaller bioventures or research institutes.
The new tie-up may signal a change in how large domestic pharmas perceive open innovation, a shift that other major Korean companies could follow amid their ongoing hunt for innovative assets.
From the domestic pharma industry perspective, the latest collaboration is expected to raise the level of open innovation in the country and away from the previously largely dominant pharma/bioventure tie-ups. This is also in line with recent global trends, given that multinationals are increasingly seeking co-development and co-research pacts between themselves, GC Pharma and Yuhan said in a joint statement.
“As the two companies have different R&D characteristics, they will largely complement each other,” said Eun Chul Huh, president of GC Pharma.
Amid rising interest in open and collaborative innovation, South Korean companies are more actively pursuing ways of working together such as co-research and development of novel drugs, but few have chosen to work together.
“I can’t speak for all major Korean pharmas, but it seems that until now, major domestic firms haven’t been able to find the right sectors where they could create synergies via collaboration. They have been largely perceiving one another as competitors rather than partners. However, if they have the will to collaborate, patent or profit sharing issues can be resolved,” Hyun Goo Kang, a public relations team manager at GC, told Scrip.
GC, formerly known as Green Cross Holdings, is the holdings firm of GC Pharma, also formerly known as Green Cross Corp..
Combining Strengths To Create Synergies
The new collaboration aims to capitalize on the two partners' respective strengths; GC Pharma’s leadership in biologics and Yuhan’s strong leadership in synthetic drugs.
GC Pharma has been focusing on developing plasma derivatives and vaccines since its establishment 50 years ago, and also has experience commercializing Hunterase, the world’s second Hunter syndrome drug, in 2012. Yuhan is known to have the country’s top drug synthesis technology.
The two companies will initially seek to develop a next generation, oral drug for Gaucher’s disease, a genetic disorder in which glucocerebroside accumulates in cells and certain organs. There are about 70 patients in South Korea and about 6,500 worldwide.
The joint project will cover the generation of a lead candidate to non-clinical studies, after which GC and Yuhan will discuss the conduct of clinical studies and possible expansion of indications. The two companies will jointly own the intellectual property, but how they might share development costs has not been disclosed.
“The two companies will jointly develop a substance candidate that has been researched by GC Pharma. We expect a possible expansion of indication to Fabry disease,” said Kang.
Increasingly Active Orphan Development
Through the collaboration, the two companies aim to improve the therapeutic environment for orphan disease patients.
GC Pharma Group is primarily looking at three sectors of innovative drug research - hemophilia and recombinant protein drugs, orphan disease treatments, and cell therapies. It is aiming to increase investment and continue to grow in all of these areas. (Also see "Interview: GC Pharma Begins New Chapter For Globalization " - Scrip, 27 Apr, 2018.)
Yuhan meanwhile has been actively investing in bioventures and start-ups, as well as licensing in promising candidates for its pipeline. As an example, it licensed in Oscotec’s third-generation EGFR inhibitor a few years ago. (Also see "INTERVIEW: Oscotec Lays Out Global Ambitions For RA, Cancer Drugs" - Scrip, 23 Aug, 2016.)
More generally, orphan drugs are increasingly seen as a future growth engine for the industry as regulators in many countries including the US FDA are offering substantial incentives to encourage development of such products, and the area has become a major focus for multinationals.
For their part, Korean pharmas and biotechs are also increasingly focusing on orphans in line with global trends, due to their relatively low development cost, high margins and the significant incentives and state support that can come with orphan drug designations.
"There are similar incentives to encourage the development of drugs for rare diseases in the US and other countries. These include additional market exclusivity, expedited review periods, and greater flexibility around clinical trial design and evidence requirements. In some markets, there are also rules around automatic reimbursement for orphan drugs, which removes a commercial barrier.
"The development of orphan drugs is therefore happening globally, not just in the US," said Daniel Chancellor, an analyst at Datamonitor Healthcare. (Also see "Pfizer’s Goettler On What Partners Look For In Orphan Drug Deals" - Scrip, 1 Aug, 2017.)
Broader Open Innovation
Yuan-Hua Ding, Executive Director and Head of External Science & Innovation AP at Pfizer Worldwide Research & Development, told Scrip recently that there is increasing interest in open innovation generally in Asia, driven by several factors including strong government support in promoting biotech/healthcare innovation, and that local/domestic pharma companies are striving to keep up with the competition and global expansion. (Also see "Scrip Asks...What Is The Current Trend For Open Innovation In Asia?" - Scrip, 17 May, 2018.)
The sharing of knowledge could be extremely valuable, leading to potentially significant and quicker advances in research and development, and this will be important for pharma company strategy, said Amanda Micklus, a Datamonitor analyst.
However, the biggest challenge for both sides is deciding on the boundaries of that sharing and how to make the dividing lines in intellectual property, especially for anything new that is generated as part of the collaboration.
From the editors of PharmAsia News.