HONG KONG – Belgian drugmaker Janssen Pharmaceutical NV, a subsidiary of Johnson & Johnson, has decided to return the rights of diabetic obesity treatment HM-12525A to Hanmi Pharmaceuticals Co. Ltd. The South Korean company said the decision followed phase II testing by Janssen, which showed the drug achieved the weight loss endpoint but didn't reach Janssen's internal criteria for blood glucose control in obese patients with diabetes.

The drug is an oxyntomodulin-based therapy (GLP-1/glucagon receptor dual agonist) that has shown evidence of improving multiple metabolic parameters, leading to improved blood glucose, body weight and insulin sensitivity. Janssen licensed the exclusive global rights (except for Korea and China) in November 2015, paying Hanmi $105 million up front, and pledging up to $810 million in payments for potential clinical development, regulatory and sales milestones. Under the agreement, Hanmi also would have been eligible for double-digit royalty payments if the drug was successfully launched in the market. (See BioWorld, Nov. 10, 2015.)

"Despite Janssen's return of rights, the drug's efficacy as an anti-obesity treatment has been proved. After internal review, we will decide plans for development of the drug as soon as possible," a spokesman for Hanmi told BioWorld Asia.

"Also, through the clinical trials conducted by Janssen, we have found that there are more needs of blood glucose control for obese patients with diabetes. We will reflect this fact when we plan the development of the drug," he added.

Hanmi's stock price (KOSPI:128940), however, has plummeted. On July 4, the day after its announcement of Janssen's returning the rights of the drug, shares dropped from SKW414,500 (US$351.12) to SKW301,500. The stock fell further, closing at SKW271,397 on July 8.

That compares to how Hanmi's stock price surged up to SKW774,827 in 2015, just after the Janssen announcement.

Janssen's return of the rights to Hanmi will affect not only the stock but also the corporate value of Hanmi, as the Korean company already has a financial burden, suggested Kevin Jin, senior analyst at Korea Investment & Securities Co. Ltd.

"Hanmi executed [an] R&D budget of around SKW200 billion this year as well as last year, and the company had only SKW26 billion in operating cash flow last year and more than SKW500 billion in net debt," he told BioWorld Asia. "This is a huge financial burden for them. The current corporate value will be hardly maintained, unless it has additional success in R&D such as technology transfer."

History of hand-backs

This is not the first time Hanmi has received drug development rights back from one of its partners. The Korean company has let its investors down with a number of license terminations.

In September 2016, German pharmaceutical company Boehringer Ingelheim GmbH decided to return the exclusive license for, and stop clinical trials of olmutinib (HM-61713), a lung cancer drug candidate. Boehringer had signed a license agreement with prospects worth a total of $730 million in July 2015; however, Hanmi received only $65 million of the up-front payment due to the termination of the contract. (See BioWorld, Oct. 3, 2016.)

Olmutinib was also exclusively licensed out to Shanghai-based pharmaceutical firm Zai Lab Ltd. in November 2015 for development in China, Hong Kong and Macau. However, the Chinese company returned the license to Hanmi in March 2018. The deal was valued at up to $92 million, but Hanmi received only $7 million as an up-front payment. After that, the Korean company stopped its domestic trial phase III of olmutinib. (See BioWorld, April 18, 2018.)

In February, U.S. pharmaceutical company Eli Lilly and Co. returned licensing rights for BTK inhibitor HM-71224. The Indianapolis-based company decided to use the BTK inhibitor in patients with rheumatoid arthritis; however, in January, the interim results showed that the study could not prove the target effectiveness of the drug. The license agreement was valued at $765 million, but Hanmi earned only the up-front payment of $53 million.

Still, the Korean company maintains several partnerships with global pharmaceutical and biotech companies, including Sanofi SA, of Paris, U.S. firms Spectrum Pharmaceuticals Inc. and Genentech Inc. and Israeli firm Teva Pharmaceutical Industries Ltd.

Hanmi has about 30 programs targeting areas such as metabolic disease (obesity, nonalcoholic steatohepatitis, diabetes), rare disease (mucopolysaccharidosis, short bowel syndrome), oncology (small-cell lung cancer, acute myeloid leukemia, solid tumors, glioblastoma) and autoimmune disease (rheumatoid arthritis). Among those is an earlier metabolic program, LAPS triple agonist HM-15211, set to report phase I data in nonalcoholic steatohepatitis at the European Association for Study of Diabetes in September.