Hanall Biopharma [Korea SE: 009420] has shifted its acquisition efforts from targeting biopharmaceutical companies in the US to cheaper EU-based firms, a company source said.
The South Korean pharmaceutical firm had been seeking purchases of companies based in the US and was in active talks with one target it already had business relations with, this news service reported 3 June 2013. It was expected a deal could be finalised as soon as 2014, company sources said at the time.
However, the source told this news service that although Hanall looked at several US companies in the oncology space for acquisition, the stock price of biotechnology companies in the US rose too high for a deal to be completed.
In the past few months oncology businesses in the EU have been a focus as they are more affordable than their US counterparts, the source said. Hanall is still trying to find a good candidate and has so far held discussions with several EU biotechnology companies, the source said. Small businesses are the ideal purchase, likely to be valued between USD 50m and USD 100m, he said.
The firm may also look to acquire a Western company in the autoimmune disease field, the source said. A strategic consultant has already carried out some work to identify potential targets in the space but the companies found were not compatible with Hanall, he noted. Autoimmune acquisitions will likely be considered more seriously in the future after the purchase of a cancer metabolism firm, he added.
A company spokesperson declined to comment on said acquisition plans.
Hanall already has unnamed strategic advisors based in Manhattan, US, which have been helping with the acquisition process in the US for oncology companies, the source said, but noted he was unsure whether the advisors have a strong EU presence. Hanall may soon need to hire advisors to help find EU targets, the source said.
Companies with cancer metabolism programmes are especially interesting, the source noted. Hanall has a cancer metabolism programme, the source said, adding that those with synergy to its current programme will be sought.
The company’s cancer metabolism programme is the mitochondrial primer HL156Can, which inhibits the mitochondrial OXPHOS system, according to the company website. It is currently going through in vivo experiments in xenograph models for liver kinase B1 inactivation in non-small cell lung cancer, BRAF V600E inhibitor-resistant melanoma, and lapatinib-resistant cancer, the company website states.
It is hoped the Korean government funding could be utilised to help complete an acquisition, the source said. The government offers funding packages to domestic pharma firms to encourage them to grow abroad as the local sector is not as strong as other industries in the region, he said. Hanall has already received several million US dollars for its drug development programmes from the government, he added.
In December 2012, the company also raised USD 28m by selling 9.8% of its equity to Yuhan Corporation, according to a company statement.
Hanall is also seeking inlicensing opportunities for its domestic market with particular interest in its Korean strongholds in the gastrointestinal and dermatology sectors, said the source.
Cancer programmes are equally interesting inlicensing targets, though the company will look to secure rights for larger Asian territories beyond Korea for this, he added. The company is also keen to sign global deals for oncology if the upfront payment is affordable and risk-sharing partnerships with shared profits could be an option, he added.
The business has no specific timeline for signing inlicensing deals, he said.
Outlicensing programmes is another goal, the source noted, adding a deal for hypertension drug HL040 could be finalised by the end of this year. Three discussions are ongoing and term sheets have been exchanged for a deal in an emerging market, he said.
He did not disclose which market the deal will include, though did say regions the firm has considered include Asia (ex-Japan), South America and Eastern Europe. The drug is in Phase III in South Korea, according to the website.
Previously, sources said it is expected HL040 will be commercialised in 4Q14.
Hanall’s market capitalisation is KRW 242bn (USD 221m).
by Natalie Morrison in London