Chong Kun Dang receives attention for its 'R&D potential'

its R&D intangible assest exceeds KRW 10 bil

11.6 bil won development intangible assets of combination drugs & clinical costs…7.8 bil increase YoY

100 bil won worth major technology export contract…Bio new drug underway

Chong Kun Dang Pharmaceutical (CKD Pharm) has reported over 10 billion won of its R&D costs as assets for the first time.

 

The cost includes increased clinical trial costs for the commercialization of its biosimilars and incrementally modified drugs (IMD).

 

The company has gained recognition for its R&D potential following a major technology export recently, which has drawn significant attention to its drug development pipeline.

 

Chong Kun Dang Headquarters

According to the Financial Supervisory Service (FSS) on 8th, the CKD’s development costs that were accounted for as intangible assets at the end of Q3 amounted to 11.6 billion won, up 2.3 billion won from 9.3 billion won reported at the end of the first half of the year, marking over 10 billion won for the first time.

 

In 2019, the FSS issued a guideline that only R&D projects with technical feasibility such as new drugs could be accounted for as assets.

 

FSS’s R&D cost capitalization guideline set was the initiation of Phase 3 clinical trials for new drugs and approval of Phase 1 clinical trials for biosimilars.

 

As for generics, approval of bioequivalence test plans.

 

CKD’s intangible R&D assets were only 3.8 billion won at the end of last year.

 

This year, it has rose to 6.6 billion won, increasing by 2.8 billion won in Q1 and 2.8 billion and 2.2 billion won in Q2 and Q3, respectively.

 

With its drug development pipeline nearing commercialization, more R&D costs were reported as assests.

 

The company's combination drugs contribute to a big part of the CKD’s R&D costs recognized as intangible assets.

 

As of the end of Q3, the hypertension combination drug CKD-828's clinical costs were capitalized at 3.2 billion won.

 

The development costs of 2.6 billion won and 1.8 billion won, for the dyslipidemia combination drug CKD-391 and the diabetes combination drug CKD-371 were recognized as intangible assets, respectively.

 

The biosimilar CKD-701, which is a biosimilar of the macular degeneration treatment Lucentis, has capitalized R&D costs of 600 million Korean won.

 

CKD received approval from the Ministry of Food and Drug Safety in October last year for Lucent-BS, and launched it in Korea in January after receiving health insurance coverage.

 

Lucent-BS is the second biosimilar released by CKD.

 

In Nov.

 

2018, the company received domestic approval for Nesbell, a biosimilar to the anemia treatment NESP.

 

CKD developed Nesbell after securing a differentiated raw material manufacturing technology in 2008 and establishing biopharmaceutical production infrastructure in 2012.

 

The amount of R&D costs capitalized by CKD had not been extensive, but its drug pipeline has attracted attention following a recent major technology export deal.

 

On the 6th of last month, CKD signed a technology export contract with Novartis for the drug candidate CKD-510.

 

The deal includes a non-refundable upfront payment of US 80 million (106.1 billion won) dollars.

 

CKD is set to receive milestone payments up to US 1.225 billion (1.6241 trillion won) dollars dependent on development and regulatory approvals.

 

This was the first major technology export contract the company had signed that exceeded 100 billion won.

 

CKD-510, which is a new drug candidate developed by CKD, is a highly selective non-hydroxamic acid (NHA) platform technology-based HDAC6 inhibitor.

 

It has shown efficacy in preclinical studies for various HDAC6 related diseases, including cardiovascular diseases.

 

It has demonstrated safety and tolerability in Phase 1 clinical trials in Europe and the USA.

 

CKD has completed a European Phase 1 trial of CKD-510 for Charcot-Marie-Tooth disease (CMT).

 

CMT is a rare hereditary peripheral neuropathy where genetic mutations lead to motor and sensory nerves damages, complicating normal walking and daily activities.

 

There is currently no definitive cure for CMT.

 

CKD’s strategy is to derive optimal drugs for various diseases based on the basic structure of HDAC6 inhibitors.

 

Currently, CKD is developing new drugs, with a platform technology for CMT, Huntington's disease, Alzheimer's disease, blood cancer, and autoimmune diseases.

 

Chong Kun Dang

CKD is also developing a new bio-drug in the oncology field.

 

CKD-702 is an anti-cancer bispecific antibody that inhibits both hepatocyte growth factor receptor (c-Met) and epidermal growth factor receptor (EGFR), which are essential for cancer growth.

 

CKD-702 binds to each receptor to block cancer cell proliferation signals and decrease receptor numbers, making it a first-in-class bio new drug from CKD.

 

A domestic Phase 1 clinical trial is currently underway.

 

To verify the efficacy and mechanism of action of CKD-702, CKD conducted research on its use as monotherapy, using non-small cell lung cancer animal models.

 

The study has shown that CKD-702 exhibits anti-tumor effects by simultaneously inhibiting the hepatocyte growth factor receptor and the epidermal growth factor receptor.

 

It was also found to be highly effective in animal models that had developed resistance to existing c-Met and EGFR targeted cancer drugs.

 

Currently, phase 1 trials evaluating its indications for non-small-cell lung cancer are underway, and there are plans to expand the indications to stomach cancer, colon cancer, and liver cancer for global clinical trials.

 

CKD's new drug, CKD-508, which is being developed as dyslipidemia treatment, has been undergoing Phase 1 clinical trials in the UK since 2020.

 

The drug is expected to lower LDL cholesterol and increase HDL cholesterol by inhibiting the CETP enzyme.

 

It is regarded as the most effective CETP inhibitor developed to date, having improved upon the drawbacks of first-generation CETP inhibitors.

 

CKD aims to complete the Phase 1 clinical trials within the year.