Orion bids KRW 548.5 bil to enter the pharma industry

makes aggressive move 4 years after declaring its entry into the bio-pharma sector

Acquires 25.7% stake of LegoChem Biosciences for KRW 54.85 billion... 4 years after announcing entry into the pharmaceutical industry in 2020

Has been making passive strides in the area, including indirect investments and joint ventures… is expected to expand business in earnest after acquiring LegoChem

The Orion Group has become the largest shareholder of LegoChem Biosciences, a prime new drug developer.

 

With the acquisition of LegoChem, Orion is expected to jump into the pharmaceutical bio-industry in earnest, breaking away from its previous passive activities such as signing a memorandum of understandings, making indirect investments, and establishing joint ventures.

 

According to industry sources on the 16th, Orion announced on the 15th that it will acquire 9.36 million and 3,283 shares of LegoChem Biosciences for KRW 54.85 billion.

 

After the acquisition, Orion will possess a 25.73% stake in the company, making it the largest shareholder of LegoChem Biosciences.

 

Orion will acquire 7,963,282 million new shares via a third-party allocated capital increase at an additional KRW 469.8 billion.

 

It will also purchase 1.4 million existing stocks from Orion’s largest stakeholders, CEO Yong-Zu Kim (1.2 million shares) and President Se-jin Park (0.2 million shares).

 

Orion’s subsidiary, Pan Orion Corp., which is located in Hong Kong, will take charge of the acquisition procedure.

 

After Pan Orion, which is a holding company for 7 corporations finalizes the acquisition, a holding company for seven entities in China, completes the acquisition process, Orion will incorporate LegoChem Biosciences as its affiliate.

 

Orion is expected to enter the pharma-bio industry in earnest with the acquisition of the new drug developer LegoChem Biosciences.

 

Orion announced its entry into three new businesses in 2020 and pointed to the pharmaceutical bio industry as one of them.

 

However, before the acquisition of LegoChem Biosciences.

 

However, as the company had only shown activity in the diagnostics business and mainly focused on laying the foundation for overseas businesses before the acquisition, the industry’s evaluation was that the company had sought to indirectly enter the market through joint ventures, etc., taking a step back from making direct investments.

 

In 2020, Orion signed an MOU with diagnostic kit maker Sugentech, and in 2021, it signed a license-out agreement with Genomictree for its early diagnosis technology for colorectal cancer.

 

The same year, it formed a joint venture in China with Shandong Lukang Pharmaceutical.

 

In 2022, the company signed a joint development agreement with Quratis to jointly develop a vaccine for tuberculosis.

 

In December 2022, the company established Orion Biologics.

 

Orion Biologics is a 6:4 joint venture between Orion Holdings, the group's holding company, and Hysense Bio, a dental disease treatment venture company.

 

However still, Orion Biologics is considered to be focusing on supporting the company’s diagnostic and vaccine business in China rather than Korea’s pharma-bio industry.

 

But with the acquisition of LegoChem Biosciences, Orion is seemingly making entry into the pharma-bio industry in earnest.

 

The company seems to be focusing the group's pharmaceutical bio business capabilities on LegoChem Biosciences while maintaining the existing management and operating system for the rest of its businesses.

 

The pharmaceutical industry is paying attention to the potential of LegoChem Biosciences that Orion seeks to acquire.

 

LegoChem Biosciences specializes in the development of antibody-drug conjugates (ADCs), which have recently attracted great interest from global big pharmas.

 

LegoChem Biosciences has signed more than 10 technology transfer agreements in the ADC field since 2015.

 

Starting with the technology transfer to China's Fosun Pharma in 2015, the company has made 13 known technology transfers.

 

Of these, 4 candidates have entered the clinical stage.

 

In addition to the upfront payment, the company is expected to receive additional milestone payments upon achievement of commercial milestones.

 

The most recent deal was signed in December last year.

 

The company signed a technology export agreement with the multinational pharmaceutical company Janssen for its ADC drug candidate 'LCB84'.

 

LCB84 is an ADC candidate drug that can target various solid tumors, including triple-negative breast cancer and non-small cell lung cancer.

 

LegoChem Biosciences has a proprietary ConjuAll linker.

 

An ADC consists of a linker, a payload (drug), and an antibody.

 

The ConjuAll linker is believed to be able to overcome the release of cytotoxic drugs in the blood and attack normal cells.

 

Based on this potential, the company has a market capitalization of more than KRW 1.5 trillion on the KOSDAQ market as of the closing price on the 15th.

 

It ranks 28th in market capitalization on the KOSDAQ market.

 

It ranks 7th among pharma-bio companies listed on KOSDAQ.