HONG KONG – South Korea's oldest and most respected pharmaceutical company, Yuhan Co. Ltd., is looking to move more aggressively into the global biopharma scene by striking up partnerships with U.S.-based companies that have larger global presences.

To that end, Yuhan (KOSPI:000100), a biopharma and chemical company, formed a joint venture with Sorrento Therapeutics Inc., of San Diego, to develop and commercialize antibodies against hematological malignancies and solid tumors. The new company is called Immuneoncia Therapeutics LLC.

"The new joint venture is a key critical milestone for us," Kim Han-joo, director and head of Yuhan's R&D Institute, told BioWorld Today.

"The company remained low-key. It takes time to [have the results] rise to the surface," Kim said. "Lately, we have been starting to become more active. We do have a lot of pipelines in discovery that may not be public yet.

"That is our strategic choice," he added. "We didn't want to create too much of a bubble about what we do."

The company's goal is to only generate expectations that it can meet.

Yuhan has positioned itself as one of the top pharmaceutical companies in terms of market cap and sales revenue in South Korea.

The low-key approach belies a long history. It was founded in 1926 by Yoo Il-han and listed on the Korea Stock Exchange 1962. Its core business consists of primary and specialty care products, dietary supplements, household and animal care and contract manufacturing of active pharmaceutical ingredients.

While profitable, Yuhan has been overshadowed by its domestic competitors. Last year, it recorded the lowest net profit among the five biggest pharmaceutical companies in the country, earning just SKW56 (US$0.05) from every SKW1,000 (US$0.87) in sales.

Nevertheless, in terms of revenue, with revenues last year of SKW858 billion (US$3.87 billion), Yuhan is larger than its better known peers Celltrion Inc. and LG Life Sciences Ltd.

That said, despite Yuhan's sheer size and enduring presence in South Korea, many wonder why it has not been as aggressive in gaining market share in the biopharma industry as other domestic companies.

Within South Korea, the industry has been generating more attention, particularly after Hanmi Pharmaceutical Co Ltd.'s success in entering licensing deals with large multinational corporations – Hanmi inked licensing deals worth more than SKW8 trillion last year.

"It's not that Yuhan is late to the race; it's just that we have been spending effort and time and resources and now it's all finally coming up," said Kim. "We have been spending 6 to 7 percent of net profit in research and development. That's around $70 million. Now we are increasing [spending in R&D] to 10 percent of our net profit," said Kim. "In absolute dollar terms we have been spending the most in R&D."

FIRST R&D-BASED JV

Yuhan's latest joint venture with Sorrento could further lift the Korean company's profile by tapping into global markets. Yuhan already has a global presence in the form of joint ventures (JVs) with Janssen Pharmaceuticals Inc., of Beerse, Belgium, (a Johnson & Johnson subsidiary), Clorox Co. and Kimberly-Clark Corp., which are U.S.-based.

Its list of subsidiaries include Yuhan Medica Corp., Yuhan Chemical Ind Co. Ltd., and Yuhan-Kimberly Ltd., a joint venture with Kimberly-Clark.

Initially, Yuhan will contribute an investment of $10 million to Immuneoncia. It will own 51 percent of the company, while Sorrento will hold the remaining 49 percent.

The company will be led by Nam Su-youn, Yuhan's chief scientific officer.

"The formation of Immuneoncia represents a significant milestone for Yuhan as this is our first research and development-based joint venture company," said Jung Hee Lee, president and CEO of Yuhan.

"Reflecting this importance, we are committing significant resources to Immuneoncia for the development of novel cancer immunotherapies, an area of significant unmet need not just in Korea but also globally," Lee said.

Lee said the JV will benefit from Korea's world-class drug development capabilities. "We have strong interest in investing in Sorrento and its innovative immuno-oncology MAb portfolio," Lee added.

Under the terms of the deal, Sorrento will grant the JV an exclusive license for one of its immune checkpoint antibodies for specified countries, while retaining the rights for the U.S., European and Japanese markets, as well as global rights for the joint venture to two additional antibodies that will be selected by Immuneoncia from a group of pre-specified antibodies from Sorrento's immuno-oncology antibody portfolio.

Sorrento was founded in 2006, and it is an antibody-centric, clinical-stage biopharma company developing treatments for cancer, inflammation and autoimmune diseases. Its lead products are multiple late-stage biosimilar and biobetter antibodies, as well as clinical CAR T therapies targeting solid tumors.

Going further, the outlook for immunotherapies is bright. A recent report by Root Analysis predicted that the annual market for immunotherapies, consisting of anti-checkpoint antibodies, vaccines and cell therapies, will exceed $35 billion while becoming the backbone of treatment for up to 60 percent of cancers over the next 10 years.

There are expectations that Immuneoncia's first of the three immune checkpoint antibodies will enter clinical trials next year.