LG Chem to acquire Aveo Pharmaceuticals for US$566M

SOUTH KOREA — South Korea’s chemicals giant LG Chem Ltd is set to acquire AVEO Pharmaceuticals Inc., a Nasdaq-listed US biotech firm, for US$566 million and enter the U.S. anti-cancer drug market, The Korea Economy Daily has reported.

AVEO, based in Boston, Massachusetts, developed Fotivda (tivozanib), a new drug that received FDA approval in March 2021 and European Medicines Agency (EMA) approval in August 2017 for the treatment of adult patients with relapsed or refractory advanced renal cell carcinoma (RCC).

LG Chem became the first Korean company to acquire a biotech company with an FDA-approved drug. LG Chem stated that it will acquire AVEO in an all-cash transaction for US$15 per share.

The planned acquisition is the latest in LG Chem’s push to diversify its previously petrochemicals-focused business into biotech and other industries.

For the transaction, the chemicals giant will make loans through its Boston-based biotech subsidiary LG Life Science Innovation Center, then form a special purpose company to acquire AVEO.

The deal is expected to close in the first quarter of 2023, LG Chem said.

The deal value of US$566 million, is larger than the annual revenue of LG Chem’s life science unit in 2021, which was 760 billion won (US$533.7 million).

Fotivda’s net product revenue in the United States was US$38.9 million last year. According to AVEO CEO Michael Bailey, the drug’s US net product revenue guidance for fiscal year 2022 is US$100 million to US$110 million.

AVEO Pharmaceuticals is expected to achieve another critical milestone through a partnership with US pharmaceutical giant Bristol-Myers Squibb Co.

The two companies entered clinical trials last year to evaluate Fotivda, in combination with Bristol-Myers Squibb’s anti-programmed cell death 1 therapy Opdivo (nivolumab) in pivotal phase III trials.

The target disease is advanced relapsed or refractory renal cell carcinoma (RCC) following prior immunotherapy exposure.

The disease under consideration is advanced relapsed or refractory renal cell carcinoma (RCC) after prior immunotherapy exposure.

LG Chem, which has been slow to develop new drugs over the last decade, has gained momentum as a result of the deal.

AVEO also has three other drugs in the pipeline, including ficlatuzumab, which is in phase III clinical trials for hepatocyte growth factors.

Its most recent new drug is Zemiglo (gemigliptin), a diabetes treatment that was first introduced in Korea ten years ago and is now available in India and a few Latin American countries.

LG Chem also has 20 drug candidates in pre-clinical and clinical trials for solid cancer, arthritis, nonalcoholic fatty liver disease, and other diseases.

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