[Edaily Reporter NA EUN-KYUNG ] LGCHEM,LTD(051910)has expanded the value of its technology export agreement with U.S.-based Rhythm Pharmaceuticals for the rare obesity treatment “Vivamelagon” from the original $305 million (approximately 400 billion won) to $855 million (approximately 1.15 trillion won). The company revised the contract terms ahead of entering global Phase 3 clinical trials, following confirmation of weight loss efficacy in Phase 2 clinical trials.

LGCHEM,LTD announced on the 3rd that it had agreed to amend the licensing agreement with Rhythm Pharmaceuticals, a U.S.-based biotech company specializing in rare diseases, regarding the global development and commercialization of the oral melanocortin-4 receptor (MC4R) agonist “Bivamelagon.”

Bivamelagon is an oral MC4R agonist developed in-house by LGCHEM,LTD; it is a new drug candidate for which LGCHEM licensed the global development and commercialization rights to Rhythm Pharmaceuticals in January 2024 while the drug was in Phase 1 clinical trials. It is currently being developed as a treatment for rare forms of obesity, including hypothalamic obesity (HO).

Hypothalamic obesity is a rare disease caused by damage to or dysfunction of the hypothalamus—the part of the brain that regulates appetite and energy balance. It can occur in patients whose hypothalamus has been damaged by brain tumors or tumor-removal surgery, and is characterized by a severe increase in appetite and rapid weight gain.

MC4R is a key receptor in the signaling pathway that regulates satiety and energy expenditure in the brain. Vivamelagon works by activating this receptor to suppress appetite and reduce body weight. It is a treatment for rare forms of obesity that targets a different mechanism than GLP-1 (glucagon-like peptide-1) class obesity treatments such as Wegovy and Mounjaro.

In particular, Vivamelagon stands out from existing MC4R therapies because it is an oral medication. The MC4R agonist “Imsebrie” (active ingredient: setmelanotide), currently marketed by Rhythm Pharmaceuticals, requires daily subcutaneous injection. In March of this year, Imsebrie received additional approval from the U.S. Food and Drug Administration (FDA) for the treatment of acquired hypothalamic obesity.

Last July, Rhythm Pharmaceuticals secured positive results from a Phase 2 clinical trial of Vivamelagon in patients with hypothalamic obesity. After 14 weeks of treatment, body mass index (BMI) decreased by 9.3% in the 600 mg dose group and by 7.7% in the 400 mg dose group. In contrast, BMI increased by 2.2% in the placebo group. Based on these results, the company plans to begin a global Phase 3 clinical trial within the year. Unlike existing injectable treatments, the drug can be taken orally, and the company expects this to expand treatment options for patients with rare forms of obesity.

The initial agreement signed by the two companies in 2024 was valued at a total of $305 million, including an upfront payment of $100 million (approximately 130 billion won). Separate sales royalties apply not only to Vivamelagon but also to the total sales of Rhythm Pharmaceuticals’ entire MC4R portfolio, with the royalty rate increasing based on the number of approved indications for Vivamelagon.

With this amendment, the total contract value has increased to $855 million. LGCHEM,LTD is set to receive a total of $350 million (approximately 470 billion won) in additional upfront payments over the four-year period from this year through 2029. Each year, a portion of the upfront payment may be converted into royalties, subject to mutual agreement between the two companies.

Milestone payments for each stage of development, approval, and sales have also been increased by $200 million (approximately 260 billion won) compared to the previous contract. The company explained that the conditions for milestone payments have also been relaxed, increasing LGCHEM,LTD’s potential to secure future revenue.

On the other hand, the sales royalty rate has been simplified. Previously, the rate increased in stages from the low to mid single digits depending on the number of approved indications for Vivamelagon; however, going forward, a fixed rate of 1% will be applied to the total sales of Rhythm Pharmaceuticals’ entire MC4R portfolio.

Royalty payments will begin in January 2029. However, if Vivamelagon is launched earlier than this, royalties will be paid starting from the date the first sales are generated. In effect, LGCHEM,LTD has adjusted the contract to lower the royalty rate—which is tied to future sales performance—in exchange for increasing the amount of the additional upfront payment and the milestone payments.

Rhythm Pharmaceuticals’ MC4R portfolio includes Imibri and Vivamelagon, which are already on the market, as well as “RM-718,” a next-generation once-weekly injectable. Consequently, LGCHEM,LTD has maintained a structure that allows it to receive royalties based not only on the development and commercialization performance of Vivamelagon but also on the total revenue of Rhythm Pharmaceuticals’ entire MC4R business.

David Meeker, CEO of Rhythm Pharmaceuticals, stated, “The MC4R mechanism of action has been proven to provide meaningful therapeutic benefits for patients with hyperphagia and severe obesity caused by rare MC4R pathway disorders,” adding “LGCHEM,LTD has succeeded in developing an oral MC4R agonist—a feat many companies have failed to achieve—and VivaMelagon has demonstrated significant weight loss effects in previous clinical trials,” he said.

He added, “This amendment to the agreement reflects our company’s strong conviction that Vivamelagon can provide tangible therapeutic benefits to patients with rare forms of obesity, and it will serve as a catalyst to further accelerate global development and commercialization.”

Son Ji-woong, President of LGCHEM,LTD’s Life Sciences Business Division, said, “This agreement reflects both companies’ confidence in the value and potential of Vivamelagon, and we expect that expanding global development will enable us to quickly provide innovative treatment options to patients with rare forms of obesity.”