![Historically, collaboration among domestic pharmaceutical companies focused primarily on production and distribution, with joint new drug development efforts being rare. Recent years have seen an emerging trend of larger firms acquiring stakes in local biotech ventures or securing rights to drug candidates. (Image: Pixabay/CCL)](http://koreabizwire.com/wp/wp-content/uploads/2024/06/pharmaceutical_000-1024x682.jpg)
Historically, collaboration among domestic pharmaceutical companies focused primarily on production and distribution, with joint new drug development efforts being rare. Recent years have seen an emerging trend of larger firms acquiring stakes in local biotech ventures or securing rights to drug candidates. (Image: Pixabay/CCL)
SEOUL, Jun. 6 (Korea Bizwire) –Domestic pharmaceutical firms in South Korea are increasingly joining forces with former competitors to develop new drugs, marking a shift in strategy.
While co-marketing existing products or outsourcing manufacturing has been common practice, collaborations now extend to the realm of novel drug development.
Last month, Ildong Pharmaceutical secured Dong-A Socio Holdings’ pharmaceutical arm, Dong-A ST, as a strategic investor in Idience, Ildong’s new drug development subsidiary. On May 29, Ildong forged another alliance with Daewon Pharmaceutical to jointly develop a next-generation treatment for gastroesophageal reflux disease.
Dong-A ST, part of the Dong-A Socio Group specializing in prescription drugs, will invest 25 billion won in Idience by the end of 2024, becoming its second-largest shareholder.
This marks the first instance of a domestic joint venture model for new drug development among South Korean pharmaceutical companies. The two firms will collaborate on Venadaparib, a targeted anticancer candidate discovered by Ildong.
In a separate deal, Daewon Pharmaceutical secured co-development rights for a potassium-competitive acid blocker (P-CAB) drug candidate developed by Yunovia, a subsidiary of Ildong.
In exchange, Daewon will cover contract fees and clinical trial expenses, though the specific financial terms were not disclosed. Industry observers note this arrangement significantly alleviates Yunovia’s burden. This co-development agreement represents Yunovia’s first revenue stream since its spin-off from Ildong.
The collaboration with Dong-A Socio Group was spearheaded by Yun Woongsup, vice chairman of Ildong Pharmaceutical. Yun, born in 1964, and Kang Jung-seok, chairman of Dong-A Socio Group, born in 1967, are of similar ages.
As the newly appointed chairman of the Korea Pharmaceutical and Bio-Pharma Manufacturers Association (KPBMA), Yun has actively facilitated exchanges among domestic pharmaceutical companies.
![Pharmaceutical industry executives pose for a group photo during the CEO Forum of the Korea Pharmaceutical and Biotechnology Association 2024, held at the Chosun Palace Hotel in Yeoksam-dong, Seoul, South Korea, on May 24. (Image: Korea Pharmaceutical and Bio-Pharma Manufacturers Association)](http://koreabizwire.com/wp/wp-content/uploads/2024/06/kpbma.jpg)
Pharmaceutical industry executives pose for a group photo during the CEO Forum of the Korea Pharmaceutical and Biotechnology Association 2024, held at the Chosun Palace Hotel in Yeoksam-dong, Seoul, South Korea, on May 24. (Image: Korea Pharmaceutical and Bio-Pharma Manufacturers Association)
On another front, ST Pharm, Dong-A Socio Holding’s active pharmaceutical ingredient subsidiary, has entered into a partnership with the International Vaccine Institute (IVI) to co-develop messenger RNA (mRNA) drugs.
The two entities aim to identify an mRNA drug candidate by 2025 and initiate clinical trials in 2026. ST Pharm will leverage its proprietary technology to identify mRNA candidates, while IVI will oversee the development process, including clinical trials, utilizing its immune-enhancing platform.
Historically, collaboration among domestic pharmaceutical companies focused primarily on production and distribution, with joint new drug development efforts being rare. Recent years have seen an emerging trend of larger firms acquiring stakes in local biotech ventures or securing rights to drug candidates.
Industry analysts view these partnerships as a strategic move to alleviate the burdens of independent new drug development and enhance success prospects. In the wake of the COVID-19 pandemic, raising funds internally for new drug research has become increasingly challenging for pharmaceutical companies.
Ildong’s collaboration with Japan’s Shionogi on a COVID-19 treatment faced setbacks after failing to obtain domestic approval, leading to financial difficulties.
Generating revenue through technology exports to multinational pharmaceutical giants has also proven arduous. Cases like Hanmi Pharmaceutical, which received a substantial upfront payment for a drug candidate only to have it returned later, resulting in significant losses, have become common.
An industry insider commented, “Raising capital from the markets is difficult, collaborating with multinational pharmaceutical companies requires substantial time and effort with low chances of success.
However, domestic pharmaceutical companies have established trust through long-standing sales and manufacturing partnerships. With well-structured agreements, they can become excellent partners.”
Ashley Song (ashley@koreabizwire.com)