A rare case of Korean company acquiring a US biotech closes story of Aveo
LG Chem will pay $15 per share, or $566 million, for Aveo Pharmaceuticals, a 43% premium to Aveo’s closing price prior to the deal’s announcement. The US company’s sole marketed product is Fotivda tivozanib, an oral VEGFR tyrosine kinase inhibitor approved to treat advanced renal cell carcinoma. FDA approved the therapy in March 2021. LG is acquiring Aveo for its US commercialization and regulatory expertise, as well as its marketed product. The main purpose of this transaction is to accelerate the global clinical development, to increase the probability of success of investigative programs, and to gain an early entry into the commercialization capabilities of the US market. LG had been preparing for M&A in the US since 2019. Aveo will complement LG’s strengths in R&D. According to Aveo’s annual report filed in March, its 65-member field-based team included 50 oncology sales professionals. LG outlined its ambitions in an investor presentation, in which it set a revenue goal of KrW1 trillion ($700 million) from innovative drugs by 2030. Sales of Fotivda could get LG almost halfway to that revenue target. The company expects peak sales of the drug to be $360 million in 2027; LG anticipates $110 million from Fotivda’s 2022 sales.
Gilead and MacroGenics announce oncology collaboration to develop bispecific antibodies
Macrogenics and Gilead announced an exclusive option and collaboration agreement to develop MGD024, an investigational, bispecific antibody that binds CD123 and CD3 using MacroGenics’ DART platform, and two additional bispecific research programs. The collaboration agreement grants Gilead the option to license MGD024, a potential treatment for certain blood cancers, including AML and MDS. MacroGenics will be responsible for the ongoing Phase 1 study for MGD024 during which Gilead may elect to exercise its option to license the program at predefined decision points. The Phase 1 study will include a dose escalation segment and an expansion segment that is intended to evaluate MGD024 as monotherapy and in combination with other therapies across multiple indications. Gilead will pay MacroGenics an upfront payment of $60 million and MacroGenics will be eligible to receive up to $1.7 billion in target nomination, option fees, and development, regulatory and commercial milestones. MacroGenics will also be eligible to receive tiered, double-digit royalties on worldwide net sales of MGD024 and a flat royalty on worldwide net sales of products under the two research programs.