[E-Daily Reporter SONG YOUNG-DOO ] The so-called “Peptron, Inc. incident” appears to be reshaping the investment landscape in South Korea’s microsphere-based long-acting drug delivery platform market. While the potential for joint research with global big pharma used to be the key factor determining a company’s value, the ability to secure actual contracts and commercialization structures has recently emerged as a new evaluation criterion. This is the backdrop against which G2GBIO, Inc. is regaining attention—having secured a joint development agreement with Samsung Bioepis and attracted financial investment (FI)—even as investor sentiment has been shaken by the controversy surrounding Peptron, Inc.’s joint research with Eli Lilly.

In the domestic long-acting platform market, Peptron, Inc.(087010), Inventage Lab Inc.(389470), and G2GBIO, Inc. are forming a competitive landscape. While all three companies are targeting the global obesity treatment market by leveraging their long-acting formulation technologies, analysts note that investors’ interest is shifting from the technology itself to “who has actually established a commercialization framework.”

G2GBIO, Inc., which had not previously garnered much attention due to its joint research with Peptron, Inc. and Eli Lilly, is now drawing renewed attention.

Following the presentation of preclinical data on its next-generation obesity treatment candidate and its high-concentration formulation technology at the American Diabetes Association (ADA) conference last month, G2GBIO, Inc. held approximately 50 global partnering meetings at BioUSA. Global pharmaceutical companies and biotech firms showed strong interest in using the InnoLAMP platform to develop their active pharmaceutical ingredients (APIs) into long-acting formulations, and inquiries continued regarding whether the technology could be applied not only to existing small molecules and peptides but also to new modalities.

In particular, the company explained that the number of new meetings with top-tier global pharmaceutical companies has increased significantly since it released data demonstrating that even high-dose peptides can be administered via subcutaneous injection. This is seen as indicating the potential to apply the platform to next-generation obesity treatments, such as quadruple agonists.

Lee Hee-yong, CEO of G2GBIO, Inc., also stated at a recent Shinhan Investment Securities forum, “Competitiveness in manufacturing costs is ultimately key in the diabetes and obesity treatment market,” adding, “Discussions with global pharmaceutical companies regarding new API projects, in addition to semaglutide, are well underway, and we expect meaningful results in the second half of this year.”

Receiving Royalties and Handling Production... G2G-Samsung Bio “First-Ever Main Contract Case”

Above all, the market is focusing on the contract structure with Samsung Bioepis. Although the deal was initially downplayed earlier this year because Samsung Bioepis is not a global “big pharma” company, the agreement between G2GBIO, Inc. and Samsung Bioepis marked the industry’s first full-scale contract for a long-acting formulation backed by a solid revenue structure.

This agreement is a three-party contract signed by Samsung Bioepis, EpisNex Lab, and G2GBIO, Inc. Samsung Bioepis secured exclusive development and commercialization rights for two of G2GBIO, Inc.’s obesity treatment candidates, including a long-acting semaglutide, and entered into a licensing agreement to pay an upfront fee and milestone payments at various development stages. Episnex Lab will conduct joint research and development (R&D) with G2GBIO, Inc. to establish a drug delivery platform for long-acting formulations.

Another reason the agreement between G2GBIO, Inc. and Samsung Bioepis is drawing attention is its revenue structure. According to the company, this agreement is designed not only to include an upfront payment, milestone payments, and ongoing royalties but also to secure revenue from production sales under future product supply agreements. The company views this agreement as a “master agreement” because it establishes a value chain that extends beyond a simple platform technology transfer to include joint development and production.

In addition, SAMSUNG EPIS HOLDINGS has invested 20 billion won in convertible bonds (CBs) in G2GBIO, Inc. Given that the joint development agreement and financial investment were made simultaneously, the market interprets this as a sign that Samsung highly values not only the company’s technological capabilities but also its commercialization potential.

CEO Lee Hee-yong also explained at a Shinhan Investment Securities forum, “Samsung Bioepis is a company with a very fast development pace,” adding, “The contract terms are quite favorable, as the structure calls for Samsung to bear development costs and labor expenses during the joint development process.”

In particular, G2GBIO, Inc.’s global pipeline is not limited to Samsung Bioepis. The company is collaborating with Boehringer Ingelheim on a long-acting peptide project for diabetes and obesity, which is reportedly currently in the large-animal evaluation phase. The company mentioned that it expects follow-up discussions to take place during the third or fourth quarter of this year.

In addition, the company is expanding its collaboration with multiple global pharmaceutical firms: it is in discussions with Global Company A regarding a new obesity treatment project, conducting Phase 2 joint development with Global Company B, and carrying out large-animal studies with Global Company C. The fact that its workforce has grown by about one-third over the past year is closely tied to this business expansion. CEO Lee explained, “Most of the additional staff are dedicated to operating our factories and production facilities,” noting that the company is also accelerating efforts to expand its production capacity.

Indeed, at the Shinhan Investment Securities forum, investor interest was focused on G2GBIO, Inc.

An official from an investment firm attending the forum said, “Hearing directly about the strategic rationale behind the investment in Samsung Bioepis—something other competitors have failed to demonstrate—made me reevaluate the significance of the deal. The explanation regarding the potential for follow-up partnerships with global obesity treatment companies also raised investors’ expectations.” The official added, “Above all, I felt a sense of trust seeing the CEO confidently address questions without evading them. The fact that investor interest was so intense that the Q&A session ran short of time was a clear reflection of the current market sentiment.”

Ultimately, the Main Contract Remains the Core of Investment Sentiment... Peptron, Inc. Has Changed the Investment Formula

On the other hand, the recent controversy surrounding Peptron, Inc. has significantly shaken investor sentiment toward long-acting platform companies in general.

After Peptron, Inc. CEO Choi Ho-il stated in a public forum that Tuzepatide was not the subject of joint research with Eli Lilly, the company issued clarifications through public disclosures and explanatory materials. However, the market perceives the discrepancy between the CEO’s remarks and the company’s explanation as a cause for concern.

Analysts also note that investor confidence has been further eroded by the overlap of these issues with existing concerns, such as the extension of the SmartDepo evaluation schedule, delays in the construction of the new plant, and the departure of key executives and employees.

An official from an investment firm stated, “Peptron, Inc. was already facing a gradual erosion of investor confidence due to the extension of the SmartDepo evaluation schedule and delays in the construction of the new plant. The recent controversy over the Terzepatide joint research has served as the final straw.” The official added, “Although the company is actively providing clarifications, it is difficult to explain all the specific details of a biotech contract due to the nature of non-disclosure agreements (NDAs), so I do not believe it will be easy to dispel market doubts in the short term. “Compounded by HLB INC.’s issue with the U.S. Food and Drug Administration (FDA)’s request for supplemental information,” the representative explained that the overall sentiment in the biotech sector is shifting toward risk mitigation.

In fact, the investment industry assesses that investor interest is shifting rapidly. An official from another investment firm said, “As stock prices in the biotech sector have recently undergone a significant correction, investors are seeking new opportunities. Rather than relying on expectations of ‘joint research with Big Pharma’ as in the past, the prevailing sentiment is to prioritize companies that have secured actual technology transfer agreements or attracted strategic investments.”

He explained, “The strong market reaction to PROTEINA CO., LTD., which recently announced a collaboration with Samsung Bioepis, fits into this same context,” adding, “Companies that have secured proven partnerships still command a premium.”

Amid this atmosphere, G2GBIO, Inc.’s agreement with Samsung Bioepis is also coming back into the spotlight. There are expectations in the market that if collaborations with global pharmaceutical companies—which have not yet been disclosed—lead to actual contracts, a business model could be established that extends beyond joint development to production, similar to the Samsung Bioepis case.

The industry views the recent Peptron, Inc. issue not as an event that undermined the growth potential of the long-acting platform market itself, but rather as a catalyst that shifted investors’ evaluation criteria. Whereas in the past, a company’s value was highly rated simply based on the fact that it was conducting joint research with a global big pharma, there is now a clear trend toward scrutinizing the actual contract structure, strategic investments, and business models that can lead to production.

An industry official stated, “The long-acting platform market is just beginning to take off,” adding, “Ultimately, the companies that will be chosen by the market are likely to be those capable of translating their technological capabilities into actual contracts, sales, and production.”