According to KG Zeroin’s MP Doctor platform, Ildong Pharmaceutical closed at 16,490 won on the KOSPI, up 13.72%, or 1,990 won, from the previous session. The stock climbed as high as 18,000 won during the trading day, briefly pushing its gain above 24%.
The most notable catalyst was a recent Patent Court ruling regarding generic versions of linagliptin, a diabetes treatment.
On Aug. 13, the Patent Court dismissed all claims filed by Boehringer Ingelheim against 17 South Korean pharmaceutical companies seeking to overturn an earlier patent tribunal decision.
The disputed patent covers the use of linagliptin in patients with type 2 diabetes who either have cardiovascular disease or are considered at high risk of developing it. The protected patient population includes those with a history of myocardial infarction, coronary artery disease, or stroke, as well as elderly patients and those with risk factors such as hypertension, smoking, and obesity.
The patent is set to remain in effect until November 2031. Although the compound patent covering linagliptin itself expired in June 2024, follow-on patents covering specific uses and patient populations remained in force.
The dispute began in June 2024, when Ildong Pharmaceutical, Boryung, Daewon Pharmaceutical, and other domestic drugmakers filed petitions for invalidation with the Intellectual Property Trial and Appeal Board.
The companies argued that the follow-on use patent could restrict the sales and expansion of their generic products if it remained valid.
After consolidating the cases filed by 17 companies, the tribunal invalidated the patent in April of last year. Boehringer subsequently challenged that ruling in the Patent Court, but its claims were again rejected.
Importantly, the ruling does not imply that linagliptin lacks efficacy as a diabetes treatment.
Rather, the court found that Boehringer had not sufficiently demonstrated that the drug provided a distinct therapeutic benefit specifically in diabetic patients at elevated cardiovascular risk.
The patent specification included data showing glucose-lowering effects in diabetic animal models and cardiovascular safety in separate cardiovascular disease models. However, the court found that it lacked concrete evidence demonstrating therapeutic benefits in the specific high-risk diabetic population covered by the patent.
The court also noted that the specification largely described plans to investigate those effects in future studies rather than presenting “specific and objective experimental results” showing how linagliptin affected cardiovascular risk in those patients.
In other words, the court determined that a plan to test a potential benefit in future clinical studies was not sufficient to support a patent as if a distinct therapeutic effect had already been established.
The court also rejected the argument that defining high-risk cardiovascular patients as a separate treatment population constituted a sufficiently inventive concept.
It noted that it was already widely understood that a substantial proportion of patients with type 2 diabetes either have cardiovascular disease or face an elevated cardiovascular risk. Given that DPP-4 inhibitors were already regarded as having relatively favorable cardiovascular safety profiles, the court concluded that a person skilled in the art could have readily considered using linagliptin in such patients.
Based on these findings, the court ruled that the claimed therapeutic effect was not adequately supported by the patent specification and that the treatment approach lacked sufficient inventive step over existing prior art.
The decision is seen as reducing some of the legal uncertainty surrounding linagliptin generics in South Korea. Ildong currently markets Linazetin, a linagliptin generic, and Linazetin Duo, a combination product with metformin.
Still, the dispute is not over. Boehringer has until September 4 to appeal the decision to the Supreme Court, meaning the ruling is not yet final.
Nor have all of Boehringer’s linagliptin-related patents been invalidated. Three formulation patents scheduled to expire in April of next year were also challenged by some domestic companies, but the Patent Court rejected those invalidation claims.
Some industry observers cautioned that the patent ruling alone does not fully explain Ildong’s sharp rally.
Other companies involved in the same litigation saw far more subdued price movements. Boryung and Jeil Pharmaceutical fell 2.21% and 4.56%, respectively, while Daewon Pharmaceutical rose just 1.63%.
“Invalidating a single patent is just one step in the commercialization process, and actual sales after launch are a separate matter,” said one pharmaceutical industry official. “Since this case involved multiple drugmakers, it is difficult to attribute the sharp rise in one company’s stock solely to the ruling.”
The sharp rise in Ildong’s stock price may also reflect renewed expectations surrounding ID110521156, its oral glucagon-like peptide-1 (GLP-1) obesity drug candidate.
In a Phase 1 study, the 200-mg dose group showed an average weight reduction of 9.9% after four weeks, with the maximum reduction reaching 13.8%.
Based on these clinical data, Ildong has been exploring licensing and co-development opportunities with global pharmaceutical companies, including through partnering activities at this year’s BIO USA.
The company is currently understood to be pursuing follow-on development, including a Phase 2 trial, while continuing discussions regarding potential licensing-out and co-development agreements.
“Share prices are not something a company can directly control, so without identifying the actual buyers, it is difficult to pinpoint a single reason for the move,” another industry official said. “It is more reasonable to view the rally as the result of the patent ruling combined with existing expectations for an obesity drug licensing deal.”
