SK Group’s 20 year-long steady investment in new drug development has finally started to shine.
SK Biopharm announced on Feb. 14 that it has forged a licensing agreement worth US$530 million with Swiss company Arvelle Therapeutics for the commercialization of cenobamate, a candidate antiepileptic drug, in Europe. Under the agreement, SK Biopharm will receive US$100 million (about 112 billion won) in down payment and up to US$433 million in royalties after the new drug is approved for sale.
The down payment SK Biopharm will receive is the third largest among drug technology exports by Korean pharmaceutical companies, following Hanmi Pharm’s Efpeglenatide long-acting insulin combo exported to Sanofi (204 million euros) and long-acting obesity diabetes drug exported to Janssen (US$150 million). Actual income for SK Biopharm is expected to be much higher since it will receive more royalties based on net sales of cenobamate generated in Europe.
An industry official said, "SK Biopharm will be able to receive most of the contract amount as it has completed the third phase of global clinical trials and filed for the New Drug Application (NDA) with the U.S. Food and Drug Administration. Including royalties, the company will be able to earn up to US$1 billion (1.12 trillion won).”
Based in Switzerland, Arvelle is a joint venture established by healthcare investors, including U.S. NovaQuest Capital Management and European LSP, to develop and market new drugs for central nervous system disorders. Arvelle will prioritize supporting the development of cenobamate with manpower and funds and apply for a new drug marketing license to the European Medicines Agency (EMA) based on global clinical data that SK Biopharm has. When the EMA gives marketing approval, cenobamate will be sold in 32 European countries, including the United Kingdom, Germany, France and Switzerland.
Considering the size of the technology export to the European market, industry analysts estimate that the net revenue will greatly increase once cenobamate enters the U.S. market, which accounts for most of the global market for epilepsy treatment. SK Biopharm filed for the NDA with the FDA at the end of last year, and as the FDA formalized the commencement of the evaluation, the results are expected to come out in November this year. Once cenobamate gets the green light for sales, SK Biopharm will begin its sales in the United States in 2020 and move on to Europe and to Asian countries, including Korea, China and Japan.
Market analysis firm Global Data predicted that the market for epilepsy treatment will grow from US$6.20 billion (6.80 trillion won) in 2018 to US$7 billion (7.80 trillion won) in 2021.