[Song Young Doo, Edaily Reporter] While South Korea’s pharmaceutical and biotech sector traded lower across the board, Sillajen stood out by hitting the daily upper price limit. In contrast, Hanmi Pharmaceutical and Hanmi Science, which had surged the day before following the announcement of a multi-billion-dollar licensing deal, failed to sustain their momentum and fell sharply the following day.

BAL0891 Targets Both TTK and PLK1, Secures FDA Orphan Drug Designation

According to KG Zeroin’s MP Doctor (formerly MarketPoint), SillaJen closed at KRW 2,960 on Aug. 25, up 29.82% (KRW 680) from the previous session. The rally was largely attributed to the company’s announcement that its key pipeline candidate, BAL0891, had received orphan drug designation from the U.S. Food and Drug Administration (FDA) for acute myeloid leukemia (AML). Buying accelerated following the announcement, pushing the stock to its daily upper limit.

A Sillajen official stated, “The stock rose to the daily upper limit after the press release announcing the FDA’s orphan drug designation was issued.”

BAL0891 is an anticancer drug candidate that simultaneously targets TTK and PLK1, two key proteins involved in cancer cell division. Sillajen is developing the drug as a potential first-in-class therapy based on its dual-target mechanism. A global Phase 1 clinical trial is currently underway in patients with solid tumors and hematologic malignancies.

The FDA orphan drug designation is expected to provide additional momentum for the development of BAL0891 for hematologic cancers. AML, the indication covered by the designation, is a blood cancer characterized by the rapid proliferation of abnormal myeloid cells in the bone marrow. The disease progresses rapidly, and relapse and drug resistance remain major challenges in treatment.

Sillajen views BAL0891’s unique mechanism—which simultaneously inhibits TTK and PLK1—as a potential advantage. Both proteins play key roles in cell division. By targeting both simultaneously, BAL0891 is being developed as a potential new treatment option for AML patients who have developed resistance to existing therapies.

The orphan drug designation also provides tangible development incentives. Sillajen will be eligible to apply for FDA clinical research grants, receive a 25% tax credit for qualified U.S. clinical trial expenses, gain access to FDA guidance during clinical development and expedited regulatory support, and qualify for a waiver of the New Drug Application (NDA) user fee.

If BAL0891 ultimately receives FDA approval for AML, it could also, in principle, receive seven years of U.S. market exclusivity for that drug and indication. The prospect of securing regulatory and commercialization advantages at an early stage of development appears to have fueled investor enthusiasm.

However, orphan drug designation does not guarantee BAL0891’s clinical success or eventual regulatory approval. As the candidate remains in Phase 1 development, Sillajen still needs to demonstrate its safety and efficacy in patients. Actual clinical data will therefore be the key factor determining the drug’s value following the recent stock rally.

A Sillajen official stated, “Given that BAL0891 received orphan drug designation at an early stage of clinical development, we believe its medical significance and potential have been recognized to a certain extent. Building on this achievement, we will do our utmost to generate more positive results throughout the remainder of the clinical development schedule.”

Hanmi Group Shares Reverse Course Just One Day After Licensing Deal

Meanwhile, shares of Hanmi Group companies reversed sharply after surging the day before on the back of a major licensing deal. Hanmi Science closed at 46,300 KRW, down 18.05% (10,200 KRW) from the previous session, while Hanmi Pharmaceutical fell 7.22% (39,000 KRW) to 501,000 KRW.

A day earlier, Hanmi Pharmaceutical licensed a key pipeline candidate from its H.O.P. (Hanmi Obesity Pipeline) obesity drug project to Genentech, a subsidiary of Roche. The deal is worth up to $2.3 billion, including an upfront payment of $190 million. The announcement sent shares of both Hanmi Pharmaceutical and Hanmi Science sharply higher, but much of those gains were given back just one day later.

The decline was largely attributed to short-term profit-taking after expectations surrounding the licensing deal were quickly priced into the stocks. Despite the pullback, however, market observers believe Hanmi Pharmaceutical still has catalysts that could support its longer-term momentum.

H.O.P., which led to the latest licensing deal, is Hanmi Pharmaceutical’s next-generation obesity drug project comprising six candidates. Launched in September 2023, the project is now approaching its first commercialization milestone after roughly three years. Efpeglenatide, or “Efpe,” which is scheduled for launch in the second half of this year, was originally licensed to Sanofi in 2015 as a diabetes drug.

Even after the rights were returned, Hanmi Pharmaceutical continued to develop the drug independently and later expanded its development into obesity treatment. It is now being positioned as the first commercial product from the H.O.P. project.

If launched as planned, Efpe would become the first obesity drug from the H.O.P project to reach the market since the project’s inception. Its development is particularly noteworthy because Hanmi continued to advance the asset independently following its previous licensing agreement and the subsequent return of rights, ultimately bringing it to the brink of commercialization. This case underscores the company’s long-term commitment to R&D and drug development.

Another key H.O.P. candidate, HM17321, is a non-incretin UCN2 (Urocortin-2) analog. The candidate is designed to address a potential limitation of existing GLP-1-based obesity drugs, which can lead to reductions in lean body mass—including muscle—alongside substantial weight loss. Hanmi is developing HM17321 as a potential first-in-class therapy designed to selectively reduce body fat while preserving or potentially improving muscle mass and function.

Industry observers also highlight the role of Hanmi Group Vice Chair Lim Ju-hyun in the design and development of the H.O.P. project.

A Hanmi Pharmaceutical official stated, “Following the passing of founder Lim Sung-ki, the company faced a number of challenges, including a management control dispute, but we never lost sight of Hanmi Pharmaceutical’s identity as a company committed to innovative drug development and continued our R&D efforts until the very end.”

The official added, “Even when circumstances could have disrupted the H.O.P. project, Vice Chair Lim Ju-hyun played a central role in maintaining its direction and providing the support necessary to carry the project forward.”