Yuhan Corp. will collect an 80 billion won ($60.1 million) milestone payment from Johnson & Johnson now that the U.S. Food and Drug Administration has cleared its lung cancer drug lazertinib. It is the first anti-cancer drug developed in Korea to win FDA approval.
The agency announced the decision on Tuesday, local time. The drug, sold in Korea as Leclaza and in the United States as Lazcluze, was approved for use with J&J’s Rybrevant (amivantamab-vmjw) as a first-line treatment. It is for adults with locally advanced or metastatic non-small cell lung cancer whose tumors carry specific EGFR mutations. Approval came under priority review and rests on positive results from the phase 3 MARIPOSA study, Korea Biomedical Review reported.
Leclaza is the ninth Korean new drug to clear the FDA. It is also the first to do so through a technology transfer to a global pharmaceutical company.
What Yuhan stands to earn
The terms of the milestone payments have never been made public. Industry officials estimate Yuhan will receive sales royalties of around 10 percent. J&J said on an investor call in December of last year that it expected annual sales of the combination therapy to top $5 billion.
J&J holds the rights, and it controls the launch. “The whole process, including the final decision, rests with Johnson & Johnson,” a Yuhan official told the publication. New drugs the FDA approves usually finish pricing and other steps within three months and then go on sale, the official added.
Yuhan CEO Cho Wook-je called the approval “the first major success of R&D investment through open innovation.” He said the company hopes it is “a milestone, laying the foundation for Yuhan to achieve its goal of becoming a Global Top 50 company.”
Track record in Korea
Korean regulators approved Leclaza as a first-line treatment in June 2023. Health insurance coverage followed within six months. In the first quarter of 2024, prescriptions reached approximately 20 billion won, and the company expects local sales to hit 100 billion won within the year.
Analyst view
Kim Seung-min, an analyst at Mirae Asset, raised his target price for Yuhan to 116,000 won from 107,000 won on Wednesday and kept a “Buy” rating. His valuation counts an operational value of 3.9 trillion won plus 3.4 trillion won for lazertinib.
That figure assumes a 100 percent success probability for first-line treatment and a 50 percent chance of receiving sales milestones. It also assumes an annual drug price of $100,000, a 40 percent peak share of the first-line EGFR-mutated market by the fifth year after launch, and a 10 percent peak share in second- and third-line markets by year seven. Kim said that as the first Korean cancer drug with global blockbuster potential to win FDA approval, it could carry “significant upside potential” under other valuation methods.
At 10:30 a.m. Wednesday, Yuhan’s stock stood at 97,300 won, up 3.51 percent from the previous session.
