South Korean pharmaceutical firms are increasingly joining forces with former competitors to develop new drugs, marking a significant shift in strategy. This trend moves beyond traditional practices such as co-marketing existing products or outsourcing manufacturing, extending into the realm of innovative drug development.
Recently, several major South Korean pharmaceutical companies have formed strategic alliances to tackle novel drug projects. These collaborations involve joint ventures and significant investments in subsidiaries focused on new drug development. The goal is to share the financial burden and enhance the chances of success by pooling resources and expertise.
For instance, one prominent pharmaceutical company secured a major investment from another leading firm in its new drug development subsidiary. This marks the first instance of a domestic joint venture model for new drug development among South Korean pharmaceutical companies. The collaboration involves developing a targeted anticancer candidate, with both firms sharing costs and responsibilities.
Another notable partnership involves the co-development of a next-generation treatment for gastroesophageal reflux disease. The partnering company will cover contract fees and clinical trial expenses, significantly alleviating the financial burden on the developing firm.
The industry’s leadership has played a crucial role in fostering these collaborations. Key figures have facilitated exchanges among domestic pharmaceutical companies, encouraging cooperation and innovation.
In addition to these domestic collaborations, South Korean firms are also engaging in international partnerships. For example, a major active pharmaceutical ingredient subsidiary has partnered with an international institute to co-develop messenger RNA (mRNA) drugs, aiming to identify a candidate by 2025 and initiate clinical trials in 2026.
Historically, collaboration among South Korean pharmaceutical companies focused primarily on production and distribution, with joint new drug development efforts being rare. However, recent years have seen a trend of larger firms acquiring stakes in local biotech ventures or securing rights to promising drug candidates. Industry analysts view these partnerships as a strategic move to alleviate the burdens of independent new drug development and enhance success prospects.
The COVID-19 pandemic has further highlighted the need for collaboration. Raising funds internally for new drug research has become increasingly challenging, and generating revenue through technology exports to multinational pharmaceutical giants has proven arduous. This environment has driven companies to seek collaborative efforts as a viable strategy.
Additionally, Woodley BioReg’s ongoing work with its existing Korean partners exemplifies how strategic collaborations can make a substantial impact in the Asian market. These efforts demonstrate that well-structured agreements and established trust can drive innovation and success in the pharmaceutical industry. One recent example of such collaboration is the EMA’s ODD positive opinion for Daehwa Pharmaceuticals’ Paclitaxel product, Liporaxel.
An industry insider commented, “Raising capital from the markets is difficult, and collaborating with multinational pharmaceutical companies requires substantial time and effort with low chances of success. However, domestic pharmaceutical companies have established trust through long-standing sales and manufacturing partnerships. With well-structured agreements, they can become excellent partners.”
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