By Park Hyong-ki
Hanmi Pharmaceutical, a listed Korean drug developer, is facing growing doubts from the market over the commercial potential of its anti-diabetes medicines following its announcement that the company has scaled down its previous technology licensing agreement with Sanofi, a French multinational drug company.
The Korean company said in a regulatory filing Thursday that it will pay back 196 million euros to Sanofi and reduce Sanofi’s payment to Hanmi from 3.5 billion euros to 2.72 billion euros for clinical development and commercialization of one of Hanmi’s proprietary diabetes treatment compounds.
Other contract revisions include Hanmi taking more financial risks in developing efpeglenatide ― a late-stage long-acting glucagon-like peptide-1 receptor agonist (GLP1-RA) and Sanofi’s licensing cancellation of Hanmi’s weekly insulin technology.
In November, 2015, the two companies agreed that Sanofi would pay 400 million euros upfront to Hanmi for the development and commercialization of Hanmi’s anti-diabetes compounds ― GLP1-RA, a weekly insulin injection and the combination of GLP1-RA and insulin drugs.
Hanmi then said that the three therapeutic compounds would potentially help diabetes patients to take less treatment and reduce their “adverse event rates.”
However, analysts are questioning the commercial viability of Hanmi’s anti-diabetes drugs following the announcement, forecasting that its share price could fall below 300,000 won in the near future.
The only thing that was left unchanged from the original contract in terms of the three compounds was Sanofi’s agreement to acquire the license for the fixed-dose weekly GLP1-RA-insulin drug combination after Hanmi develops it further. This indicates that Sanofi is unwilling to take unnecessary risks with the Korean company’s technology.
“Without successfully developing the weekly insulin, there is no guarantee for the combination drug. Until Hanmi can show progress in clinical trials and resolving doubts over the compounds’ commercial potential, investors should be conservative toward the company,” said Lee Tae-young, analyst at Meritz Securities.
Hanmi shares have been facing increased volatility, plummeting to barely above 300,000 won from its 52-week high of 791,000 won.
Analysts have been downgrading the company’s potential since the termination of an anticancer licensing deal with Boehringer Ingelheim, a German pharmaceutical giant.
It also had to face a probe for alleged insider trading using nonpublic information regarding the deal with Boehringer Ingelheim. Stock regulators were trying to uncover whether the Korean drug firm provided the deal cancellation information to institutional investors before Hanmi posted its announcement last September.
The insider trading scandal allegedly involved those investors making profit through short-selling of Hanmi shares.
Lim Sung-ki is the founder and chairman of Hanmi Science, which holds a majority 41.37 percent stake in Hanmi Pharmaceutical. Lim and his family own a 66.5 percent stake in Hanmi Science.