Hanmi shares rise 30% with diabetes treatment license deal
Researchers at Hanmi Pharmaceutical carry out drug test using its own technology which enhances absorption into the body. / Korea Times file
By Kim Jae-won
Hanmi Pharmaceutical’s shares hit the upper band of daily trading Friday thanks to its $4.2 billion licensing deal to develop diabetes treatments with French drug maker Sanofi.
They jumped 30 percent, or 164,000 won, to 711,000 won on the nation’s main bourse, the KOSPI. Hanmi’s market capitalization reached 7.3 trillion won.
The rise came a day after the Korean company said it had signed a license agreement with Sanofi to develop a portfolio of experimental, long-acting diabetes treatments, valued at up to 3.9 billion euros. It is the largest licensing deal for a Korean pharmaceutical firm.
Hanmi said the new treatments will minimize side effects by reducing the number of injections based on technology called long-acting protein/peptide discovery, or LAPSCOVERY.
Under the agreement, Hanmi will receive an upfront payment of 400 million euros. It is also eligible for up to 3.5 billion euros in development, registration and sales milestones, as well as double-digit royalties on net sales.
Analysts expect Hanmi shares to continue their climb, raising the target price to 1 million won.
“Its anti-cancer pipeline HM95573 and obesity treatment HM12525 are also expected to be exported later,” said Koo Wan-seong, an analyst at HI Investment & Securities, in a report. “Investors can bet on them, too.”
But market watchers said investors need to be careful because Hanmi is under investigation by the prosecution for alleged stock manipulation. Earlier this week, the Seoul Southern Prosecutors’ Office raided a local asset management firm that allegedly bought Hanmi shares in March with inside information obtained from Hanmi officials.
With the deal, Sanofi will obtain an exclusive worldwide license to develop and commercialize the treatments, called the “Quantum Project,” while Hanmi will retain an exclusive option to co-commercialize the products in Korea and China, the company said.
“We are pleased that Sanofi, with its long heritage and as a proven leader with a solid track of success in diabetes, has recognized the value of Hanmi’s Quantum Project,” said Hanmi Pharmaceutical CEO Lee Gwan-sun.
“We are confident that we have found the right partner and are excited for the potential this license agreement with Sanofi will bring to the development of Hanmi’s Quantum Project and possibilities this could offer to people with diabetes.”
Sanofi said development of the treatments will help diabetes patients overcome their disease.
“The agreement to develop these three investigational diabetes medicines confirms Sanofi’s long-term commitment to people with this disease,” said Pascale Witz, an executive vice president at Sanofi.
“We now have the opportunity to expand our existing portfolio by including medicines that are administered weekly as well as daily. In these ways, we aim to complement our current offerings and work to serve a broader patient population.”
Witz will lead the company’s new organizational structure, the Global Diabetes and Cardiovascular Care Business Unit.