LG Chem completes acquisition of US bio-company AVEO

Finances KRW 700 billion to its US Life Science subs

Invests USD 570 million in its US subsidiary... will complete M&A by the 20th

Will transfer its oncology pipeline to AVEO Pharmaceuticals... to seek early commercialization of the drug locally

Invest KRW 2 trillion in 5 years... aims to release 4 FDA-approved new drugs by 2030

Executives and employees including LG Chem Vice Chairman Hak Cheol Shin (first row, fourth from the left), AVEO CEO Michael Bailey (next to VC Shin), LG Chem Life Sciences President Jeewoong Son (first row, far left) met to take a celebratory photo

LG Chem has completed the acquisition of the US bio-company AVEO Pharmaceuticals and plans to make the leap to become one of the 'global top 30 pharmaceutical companies focusing on the oncology business.

 

On the 19th, LG Chem announced that it had invested KRW 707.2 billion (USD 571 million) in its U.S.

 

affiliate, ‘LG Chem Life Science Innovation Center,’ to acquire AVEO Pharmaceuticals on the 18th.

 

The company plans to complete the M&A process by the 20th.

 

LG Chem received approval for the HSR filing on December 1, 2022.

 

Afterward, the merger passed the shareholders’ meeting and was approved by the Committee on Foreign Investment in the United States (CFIUS) on the 17th.

 

After the acquisition, AVEO will be integrated as a subsidiary of LG Chem.

 

However, the company will be operated independently as before based on its oncology business capabilities.

 

AVEO Pharmaceuticals, which was established in Boston, MA in 2002, owns full capabilities ranging from clinical development, approval, sales to marketing in oncology.

 

The company received FDA approval for its targeted therapy Fotivda for the treatment of renal cell carcinoma in 2021.

 

In only 2 years since the release of the new drug, the company raised KRW 130 billion last year, and sales are expected to grow over 60% and achieve KRW 210 billion this year.

 

The US securities companies expect sales of Fotivda to reach KRW 450 billion by 2027.

 

Through the acquisition, LG Chem aspires to grow as a global pharmaceutical company in the field of oncology.

 

In the mid-to-long term, the company will transfer the company’s new anticancer drug pipeline to AVEO and accelerate the commercialization of new oncology drugs in the US.

 

LG Chem is currently developing cell therapies and immune checkpoint inhibitors in the preclinical stage.

 

With the merger, the Life Science Innovation Center, which owns strengths in early-stage research and manufacturing process development, will be in charge of ▲discovering promising anticancer candidate substances, ▲preclinical and early-stage clinical trials, and the ▲commercialization process development, and AVEO, which owns know-how in clinical development and sales in the US market, will be in charge of ▲later stage research of the company’s oncology pipeline, and ▲commercialization.

 

In addition, the company plans to continue reinforcing its anticancer product portfolio by promoting the introduction of oncology tasks in late-stage clinical trials near commercialization.

 

LG Chem plans to invest KRW 2 trillion in its bio-business by 2027 and release 4 or more new drugs in the fields of oncology and metabolic diseases in the global market by 2030.

 

Also, the company plans to achieve sales of KRW 2 trillion by 2027 by expanding sales in existing businesses such as diabetes, vaccines, growth hormones, and oncology.

 

After sales of new drugs currently under development begin in earnest in 2030, LG Chem expects sales to continue to grow by hundreds of billions of won each year.

 

Hak Cheol Shin, Vice Chairman & Chief Executive Officer at LG Chem, said, “We will focus on fostering Aveo as a future bio hub that can drive the growth of our oncology business and combine and maximize synergies of our business to make the leap forward and become one of the 'global top 30 pharmaceutical companies focusing on the oncology business.’ Michael Bailey, CEO of AVEO, said, “The merger has brought AVEO one step closer to its vision of ‘improving the lives of cancer patients.’ By combining the capabilities of the two companies, we will grow to another level and become a company that continues to release new drugs