Update: Orion buys stake in LegoChem as biotech push goes on

Food group Orion Group has taken a 25% in South Korean biotech LegoChem Bioscience, becoming its largest shareholder, as part of a push into the biotech sector.

Orion is paying 549 billion won ($415 million) for the stake in the company, which has seen growing interest in its drug discovery engine, which spans small-molecule and antibody-drug conjugate (ADC) drugs and focuses mainly on cancer, fibrotic and infectious diseases.

Just last month, Johnson & Johnson forked out almost $100 million upfront as part of a $1.7 billion licensing deal for LegoChem’s LCB84, a Trop2-targeting ADC in phase 1/2 clinical testing that has potential across various solid tumour and blood cancers.

The ADC platform has also attracted a string of partnerships from the likes of Takeda, Amgen, Iksuda Therapeutics, and Fosun Pharma, amongst others.

Taking a stake in LegoChem gives Orion a position in ADCs, which have emerged as sought-after assets in oncology as well as autoimmune diseases in the last couple of years and prompted a string of major M&A and partnering transactions that show little signs of letting up. Just this month, Johnson & Johnson continued a run of recent big-ticket deals with a $2 billion play for California ADC specialist Ambrx.

Orion, best known as a snackfood and confectionary company, has been expanding into new areas including biopharma of late through a series of deals, including the formation of a joint venture in China with Shandong Lukang Pharmaceutical and the formation of Orion Biologics, a dental therapy JV partnered with HysensBio.

LegoChem’s chief executive Yongju Kim said that amid the ADC boom, the company’s platform – which features a unique linker molecule and toxin – is poised to deliver 10 clinical candidates within the next five years but needs around 1 trillion won ($757 million) to be invested in R&D.

“I became convinced that Orion was the optimal strategic partner” for that effort, wrote Kim in a letter to shareholders, adding that the Finnish drugmaker “had the goal of finding a new growth engine through entry into the biotechnology industry and chose our company as the target.”

He added: “Orion has shown deep trust in the path that LegoChem…has taken over the past 18 years, and has shown a firm will to support and work together as a family as the management, including myself, pursues more active R&D.”

(An earlier version of this article erroneously identified Finnish pharma group Orion as the purchaser of the LegoChem stake. We sincerely apologise for the error.)

Photo by charlesdeluvio on Unsplash