[Photo and Text by E-Daily Reporter NA EUN-KYUNG ] D&D Pharmatech Inc.(347850)has entered into full-scale technology transfer negotiations following the release of tissue biopsy results for DD01, a candidate drug for metabolic and alcoholic steatohepatitis (MASH). Notably, it has been confirmed that JP Morgan, a global investment bank (IB), was the first to propose collaboration on DD01, even during the early data phase. Separate from the technology transfer of DD01, D&D Pharmatech Inc. is also working to secure future growth momentum by advancing TLY012, an anti-fibrotic treatment in its next-generation pipeline, into clinical trials for the indication of cirrhosis in the first half of next year.

“DD01,

First Identified by JPMorgan… Expectations for a Major Global Deal”

Lee Seul-ki, CEO of D&D Pharmatech Inc., recently met with E-Daily’s pharmaceutical and biotech premium content outlet, Pharm E-Daily, at the company’s headquarters in Pangyo, Seongnam, Gyeonggi Province. She stated, “J.P. Morgan reached out to us even before the 12-week data for DD01 was released,” adding, “There was strong demand from global pharmaceutical companies actively exploring the MASH field, and after the 12-week data was released, we began collaborating even more closely.”

Currently, D&D Pharmatech Inc. is utilizing the J.P. Morgan Healthcare team as a business development (BD) advisor for the technology transfer of DD01. It is considered highly unusual for a domestic biotech venture to bring J.P. Morgan—one of the world’s largest investment banks—to the forefront while pursuing a major global technology transfer.

According to CEO Lee, JPMorgan’s interest began even before the announcement of the DD01 tissue biopsy results. He explained that it was not the company that first sought advice, but rather JPMorgan that reached out to D&D Pharmatech Inc. while exploring promising assets in the MASH field.

“J.P. Morgan reached out first because major global pharmaceutical companies were actively seeking MASH pipelines at the time,” he said. “We had been in communication even before the 12-week data was released, and after verifying the data, we gained confidence and began to formally establish a ‘one-team’ structure.”

D&D Pharmatech Inc.’s decision to appoint JPMorgan as its business development (BD) advisor was based on its experience with large-scale technology transfer negotiations. Generally, engaging a global investment bank incurs significant advisory fees. However, the company determined that this would enhance its negotiating power enough to more than offset those costs.

CEO Lee said, “While engaging JPMorgan involves significant costs, we believed it had the capability to scale up the deal size accordingly,” adding, “Unlike past technology transfers we handled internally, we judged that JPMorgan would be a partner capable of raising the contract size and terms to the next level during negotiations with global big pharma, based on market intelligence and analysis of competing pipelines.”

In fact, major technology transfers and mergers and acquisitions (M&A) have been occurring one after another in the MASH sector recently. Last year, Novo Nordisk secured the rights to Boston Pharmaceuticals’ efruxifermin for approximately $2 billion (about 3 trillion won). Earlier, Gilead Sciences acquired CymaBay Therapeutics, a developer of MASH therapies, for $4.3 billion (about 6.5 trillion won).

As MASH emerges as a key investment area for global pharmaceutical companies, the value of assets with late-stage clinical data is rapidly increasing. However, D&D Pharmatech Inc. is prioritizing the selection of a partner that can maximize the commercial potential of DD01 over simply securing a high upfront payment.

“While the size of the upfront payment is important, what ultimately matters is finding a partner capable of successfully executing late-stage clinical trials and commercialization,” he emphasized, adding, “If DD01 successfully progresses through global Phase 3 trials and is commercialized, the value the company will gain thereafter will be far greater.”

DD01 met key endpoints—including resolution of MASH and improvement in fibrosis—in recently released 48-week tissue biopsy data. The company highlights as a particular strength the fact that consistent results were confirmed not only through pathologist readings but also through independent AI-based analyses.

CEO Lee remarked, “The fact that positive results were confirmed across all three independent analysis methods is a result that would be difficult to achieve without actual drug efficacy,” adding, “We believe there is a high likelihood that these results can be sufficiently replicated in large-scale late-stage clinical trials.”

Following DD01, the Next Big Bet Is TLY012… Clinical Trials for Cirrhosis to Begin in the First Half of Next Year

D&D Pharmatech Inc. plans to develop TLY012 as its next-generation core pipeline following DD01. TLY012 is an antifibrotic therapy that works by directly removing collagen accumulated in the liver, setting it apart from the many MASH treatments currently in development that focus on improving fatty liver and inflammation. In particular, TLY012 primarily targets patients with cirrhosis (F4), for whom there are currently virtually no treatment options.

CEO Lee stated, “While DD01 targets patients with F2–F3 and early-stage F4 cirrhosis, TLY012 is a program aimed at patients with true F4 cirrhosis,” adding, “We have already received FDA approval for an Investigational New Drug (IND) application for a different indication, and we plan to enter clinical trials for cirrhosis in the first half of next year after completing the indication change process.”

The company is also considering a strategy to conduct repeated dosing in liver disease patients starting from early-phase clinical trials to secure proof-of-concept (PoC) data at an early stage. Discussions regarding this matter are currently underway with the U.S. Food and Drug Administration (FDA).

CEO Lee said, “We have accumulated five years of global MASH clinical development experience while conducting the DD01 clinical trial,” adding, “We will be able to develop TLY012 more quickly and efficiently by leveraging that experience.”

D&D Pharmatech Inc. plans to build a portfolio covering the entire MASH treatment cycle through DD01 and TLY012.

He said, “If TLY012 can reverse cirrhosis to stage F3 or F2, a strategy of sequentially applying treatments like DD01 afterward would also be possible,” adding, “Our long-term goal is to grow into a company with a therapeutic portfolio that covers all stages of MASH.”