[Kim Jin Soo, Edaily Reporter] The KRX Health Care Index rose 4.53% from the previous session on Oct. 1, signaling a rare tailwind for South Korea’s pharmaceutical and biotech sector. Among the gainers, GIInnovation and G2GBio drew investor attention as expectations grew over potential licensing deals.

AbClon also extended its rally for a third consecutive session after announcing an expansion of indications for AC101, a drug candidate it previously licensed to Henlius.

GI Innovation Rises on Licensing Hopes

Shares of GI Innovation closed regular trading at 9,540 won, up 20% from the previous session. The rally was attributed to growing expectations that resigercept, or YH35324/GI-301—an allergy treatment candidate being co-developed with Yuhan Corp.—could be licensed to a global pharmaceutical company.

Resigercept was originally discovered by GI Innovation. In July 2020, the company signed a licensing and joint research agreement with Yuhan worth up to 1.409 trillion won ($1.0 billion). The deal included an upfront payment of 20 billion won, with the remaining 1.389 trillion won tied to development, regulatory, commercialization, and sales milestones. Running royalties on net sales are separate.

If Yuhan licenses the global rights to resigercept to a third party, GI Innovation is entitled to 50% of the proceeds from that licensing deal. A global transaction could therefore provide GI Innovation with an additional cash inflow, while subsequent development progress and commercialization could generate further milestone payments and royalties.

Kim Yul-hong, Yuhan’s head of research and development, raised expectations for a deal in May, stating that the company “expects to be able to share good news in the third quarter” regarding resigercept. These remarks have fueled market expectations that a licensing agreement could be imminent.

A Yuhan official said the timing could change depending on contract negotiations.

“For resigercept, we are considering not only an active licensing-out strategy but also the establishment of a NewCo backed by domestic and overseas funding to maximize the asset’s market value at an early stage,” the official said.

G2G Bio Pushes for Global Licensing of InnoLAMP

Shares of G2G Bio closed at 42,700 won, up 20.79% from the previous session. The gain followed the company’s announcement of plans to accelerate the global commercialization of InnoLAMP, its proprietary long-acting injectable (LAI) platform, amid rapidly growing demand for long-acting formulations.

In a notice posted on its website late last month, G2G Bio stated that demand for long-acting injectables (LAIs) is rising, particularly in the diabetes and obesity markets, driving increased interest from global pharmaceutical companies in its InnoLAMP platform.

According to the company, global drugmakers are evaluating a range of drug-delivery platforms to identify the formulations best suited to their compounds. G2G Bio noted that InnoLAMP has garnered attention for its use of established polymers, high drug-loading capacity, scalable manufacturing, and patent protection.

G2G Bio is also expanding InnoLAMP beyond semaglutide to high-dose peptide drugs, including cagrilintide, tirzepatide, and retatrutide, which target multiple metabolic pathways. The company is also developing a long-acting formulation of CagriSema, a combination of cagrilintide and semaglutide, and has secured related microsphere patents.

“Based on these capabilities, we are working with multiple global pharmaceutical companies, and partnership discussions with a global company that we disclosed earlier this year are progressing as planned,” a G2G Bio official said. “We expect the work we have carried out with global partners to begin translating into tangible outcomes starting in the fourth quarter.”

AbClon Shares Rise as AC101 Value Increases and Return Risk Declines

AbClon shares rose 42.2% over three trading sessions, from 19,310 won on Sept. 28 to 27,450 won on Oct. 1. The rally followed an expansion of the development program for AC101, or HLX22, a HER2-targeting antibody drug candidate that AbClon licensed to Henlius, raising expectations for greater future revenue.

AC101 was discovered by AbClon and licensed to Henlius for global development. Henlius bears the costs of clinical development and commercialization, while AbClon is eligible to receive development milestone payments and royalties on sales.

According to AbClon, Henlius has continued to expand clinical studies for AC101 beyond gastric and breast cancer, bringing the total number of clinical programs and indications under investigation to nine.

For AbClon, the significance lies in the expansion of the potential royalty base from a single licensed asset. The company does not have to directly fund large late-stage clinical trials but could benefit from higher revenue if AC101 gains approval and achieves sales across additional indications.

The broader development program could also reduce AbClon’s dependence on the clinical outcome of any single cancer indication.

This has become increasingly relevant as several drug candidates licensed by South Korean pharmaceutical and biotech companies to overseas partners have been returned this year. These include CG Invites’ CG-806, FutureChem’s FC303, and Hanmi Pharmaceutical’s belvarafenib.

As such cases increase, investors are paying closer attention not only to whether a company can secure an initial licensing deal, but also to whether its partner continues to invest in the asset afterward. Henlius’ continued expansion of AC101 into additional indications suggests a lower risk of the rights being returned, although the outcome will ultimately depend on clinical development and commercialization.

“If a company relies heavily on one or two drug candidates, the return of rights can create significant risk,” said an AbClon official. “Simply signing a licensing deal is no longer enough to attract significant attention. Investors are increasingly focused on whether the asset can successfully advance through subsequent clinical development.”