Open innovation is taking hold as a strategy to improve the efficiency of new drug development, as companies seek to share risk and speed commercialization in an industry that requires heavy spending and long timelines.
Industry officials said March 19 that partnerships between pharmaceutical companies and biotech firms are expanding. Drugmakers can reduce research burdens by bringing in outside technology, while biotech startups gain funding and clinical development support.
A leading example is Yuhan Corp.’s lung cancer drug Lekraza. The non-small cell lung cancer targeted therapy was developed by Oscotec and licensed to Yuhan in 2015 at the preclinical stage. Yuhan later licensed it out to global drugmaker Janssen for up to 1.4 trillion won while Phase 1 trials were underway. Under the deal, Janssen holds development and commercialization rights, while Yuhan retains rights in South Korea. Of Yuhan’s 33 pipeline programs, 17 are sourced externally.
Jung Yoon-taek, head of the Korea Pharmaceutical Industry Strategy Institute, said a model in which biotech ventures develop early technology, traditional drugmakers raise its value through clinical trials, and then transfer it to global companies is efficient in terms of specialization and division of labor.
Open innovation is also extending beyond licensing into investment. Traditional drugmakers are joining promising biotechs as strategic investors, taking early stakes in growth potential.
DongKoo Bio & Pharma recently bought 1 billion won of a 27 billion won convertible bond issued by Genome & Company. Since 2020, it has invested about 3.5 billion won in Genome & Company through equity purchases and additional buying.
DongKoo Bio & Pharma is strong in manufacturing and sales of dermatology and urology prescription drugs, but antibody-drug conjugates, or ADCs, are considered technically demanding and high-risk. The investment is seen as a move to deepen its partnership by supporting Genome & Company’s ADC-focused drug development.
Co-development is also being used to improve the odds of success. Canarpta Therapeutics, an ADC design specialist, has bispecific ADC technology that targets two markers at the same time.
GC 녹십자 invested a total of 7 billion won in Canarpta Therapeutics in two rounds in 2020 and 2023, and the companies are jointly developing the bispecific ADC KNP-701. Lotte Biologics also joined the effort, investing 1.2 billion won in 2023 to participate in co-developing an ADC platform.
Handok is also pursuing open innovation, jointly developing the bile duct cancer treatment tovesimig with ABL Bio and Compass Therapeutics. It aims to launch the drug in South Korea in 2027 as its own new medicine. Bile duct cancer is a rare cancer with few treatment options, and Handok is seeking to shift from a business centered on in-licensed products to one that holds its own new drugs. Handok signed a licensing agreement with ABL Bio, the original developer of tovesimig, securing rights in South Korea.
An industry official said domestic companies have limited research and development resources compared with global drugmakers, making collaboration around technologies with higher chances of success a practical choice. With the domestic market saturated, the official added, open innovation is not merely optional but a way to survive by operating efficiently with less capital.
* This article has been translated by AI.
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