[Edaily Reporter NA EUN-KYUNG ] LigaChem Biosciences(141080)is poised to benefit from two key drivers in the second half of the year: cash inflows and the release of key clinical data. This is because, amid growing expectations regarding potential development milestones related to Ono Pharmaceutical and profit sharing resulting from a technology re-transfer by a partner company, the company is also scheduled to announce clinical data for its human epidermal growth factor receptor 2 (HER2) antibody-drug conjugate (ADC) and receptor tyrosine kinase-like orphan receptor 1 (ROR1) ADC. The market is focusing on events that could lead to actual cash generation and an increase in pipeline value, rather than simply the success of technology transfers.

Second Half of the Year: Growing Expectations for Cash Inflows

One of the key investment points for LigaChem Biosciences in the

second half

of the year is the potential for cash inflows. First, development progress on the program licensed to Japan’s Ono Pharmaceutical is a key focus. A LigaChem Biosciences official stated, “Development of the ADC program licensed to Ono Pharmaceutical is proceeding faster than expected.”

In fact, on June 8, Ono Pharmaceutical announced via the Japan Clinical Trials Registry (jRCT) that patient recruitment for the Phase 1 clinical trial of ONO-7429 (LigaChem Biosciences’ development code: LCB97) had begun. Although specific contract terms have not been disclosed, considering that development milestones typically occur upon completion of the first patient dosing when entering clinical trials, it is highly likely that the company will receive a milestone payment before the end of the year.

In 2024, LigaChem Biosciences signed a technology transfer agreement with Japan’s Ono Pharmaceutical for the global development and commercialization rights to LCB97, an L1CAM-targeted ADC candidate. Excluding royalties, the total contract value upon commercialization is approximately $700 million (943.46 billion won), making it one of the largest ADC technology transfer deals Ligacem has concluded with a global big pharma company.

L1CAM is a cell adhesion protein that normally aids in the growth and migration of nerve cells; however, it is known that increased expression in solid tumors contributes to cancer cell invasion and metastasis, resistance to anticancer drugs, and a poor prognosis. As a target protein that is expressed at low levels in normal tissue but at high levels in solid tumor cells, it has been consistently studied as a potential ADC target; however, few companies are developing L1CAM-targeted ADCs. In 2024, Ono Pharmaceutical also announced that it aimed for LCB97 to become a first-in-class drug in the solid tumor field.

In addition, the possibility of technology re-transfer by partner companies is drawing attention. For LigaChem Biosciences’ HER2 ADC, LCB14, Fosun Pharma holds the rights in China, while the UK-based ADC developer Iksuda holds the global rights.

Iksuda is currently conducting clinical trials in the United States, Australia, New Zealand, and Singapore. According to Iksuda, the Phase 1b clinical trial for IKS014 (known as LCB14 during development at LigaChem Biosciences) is scheduled to be completed in the second half of this year. The biotech industry views these clinical results as a key turning point that will determine the potential for a future re-licensing deal with global pharmaceutical companies.

An official from LigaChem Biosciences stated, “Iksuda and CStone are companies that are focused on the potential for future third-party technology transfers rather than conducting late-stage clinical trials and commercialization on their own.”

It is reported that LigaChem Biosciences has secured a profit-sharing structure in some of its agreements—including those with Iksuda and CStone—under which it shares in the proceeds from future third-party technology transfers. Accordingly, if Iksuda or CStone subsequently transfers its assets to a global pharmaceutical company, LigaChem Biosciences will also receive a portion of the upfront payment.

HER2 ADCs are currently one of the most actively traded areas in the global pharmaceutical and biotech industries. Last year, U.S.-based Pfizer acquired the global rights to Disitamab Vedotin (RC48), a HER2 ADC developed by China’s RemeGen, for a total of $4.3 billion (approximately 6.6 trillion won). Since Daiichi Sankyo and AstraZeneca’s “Enhertu” expanded its market by demonstrating efficacy not only in HER2-positive breast cancer but also in patients with low HER2 expression, competition to secure follow-up HER2 ADCs has intensified. Industry observers speculate that the HER2 ADC currently under development by Iksuda could attract the attention of global pharmaceutical companies if it generates meaningful clinical data.

HER2 and ROR1 ADC Data to Be Announced

In the second half of the year, clinical data on major pipelines being developed by partner companies—in addition to those from Iksuda—are expected to be released in succession. A prime example is the ROR1 ADC being developed by Cystone. Cystone is currently conducting a global Phase 1b clinical trial in the U.S., China, and other countries. Results from the Phase 1b trial are expected to be released in the second half of this year.

LigaChem Biosciences’ ROR1 ADC LCB71 (Cystone development code CS5001) is characterized by the use of a PBD prodrug, which addresses the limitations of existing PBD-class drugs. PBD (Pyrrolobenzodiazepine) is a cytotoxic payload incorporated into ADCs. LigaChem Biosciences has designed PBD to activate selectively within tumors, focusing on addressing the toxicity issues raised by existing PBD-based ADCs.

CS5001 is a candidate drug for the treatment of diffuse large B-cell lymphoma (DLBCL), a type of blood cancer that has recently gained widespread attention as an indication for “Limkato,” the chimeric antigen receptor T-cell (CAR-T) therapy developed by Curocell Inc.(372320). Currently, the standard first-line treatment is the R-CHOP regimen, which combines rituximab with the chemotherapy drugs cyclophosphamide, doxorubicin, vincristine, and prednisolone. Cystone aims to position CS5001 as a first-line treatment through combination therapy with R-CHOP.

Although the current global market for DLBCL treatments is estimated to be around $5 billion (approximately 7.7 trillion won), LigaChem Biosciences and Cystone view the potential market size as much larger. This is because DLBCL is the most common subtype of adult non-Hodgkin lymphoma, and R-CHOP—currently the standard first-line treatment for DLBCL—is a combination therapy that uses rituximab, which was approved about 30 years ago, and chemotherapy drugs developed decades ago. Since R-CHOP consists mostly of low-cost drugs whose patents have expired, the market size is relatively small compared to actual treatment demand. LigaChem Biosciences believes that if new targeted therapies, such as CS5001, enter the first-line treatment market, the market size itself is likely to expand significantly beyond current levels, accompanied by a shift in the treatment paradigm.

A LigaChem Biosciences official stated, “In the second half of the year, data on Iksuda’s HER2 ADC and Cystone’s ROR1 ADC will be key events,” adding, “The market is currently most focused on clinical data from our partner companies.”

In the past, LigaChem Biosciences primarily pursued a strategy of licensing out candidate compounds at the preclinical stage to secure R&D funding. LCB14 and LCB97 are prime examples of this. However, having now established a cash-generating structure based on milestones and royalties through 15 technology transfers, the company is shifting its focus to a strategy of increasing the value of its candidate compounds before licensing them out.

LigaChem Biosciences official said, “The company’s top priority right now is to advance candidate compounds to the clinical stage as quickly as possible,” adding, “We are proceeding with development with the goal of securing approval for a total of five Investigational New Drug (IND) applications this year. Of these, we will conduct clinical trials for two in-house.”