Hanmi, another mega out-licensing deal on a novel drug

The deal ranks among the top 10 upfront payments on record

Hanmi Pharmaceutical secures a technology transfer agreement with Eli Lilly after 11 years… KRW 110 billion upfront payment

Upfront payment secured by Hanmi Pharmaceutical accounts for 6% of the total contract value…the highest record among recent out-licensing deals

Hanmi Pharmaceutical has secured another novel drug technology transfer agreement with global pharma Eli Lilly after 11 years. With an upfront payment exceeding KRW 100 billion, the deal ranks among the top 10 upfront payments in the Korean pharma and biotech industry. The upfront payment secured by Hanmi Pharmaceutical accounts for 6% of the total contract value. It is a megadeal with one of the highest upfront-to-total deal-value ratios among recent technology transfers by domestic companies.

Hanmi Pharmaceutical out-licenses novel drug to Lilly after 11 years...KRW 110B upfront payment ranks in Top 10 on record

Hanmi Pharmaceutical announced on June 1st that it has signed an exclusive license agreement with Eli Lilly for the development, manufacturing, and commercialization of its novel biologic candidate, ‘sonefpeglutide’.

Hanmi Pharmaceutical will receive a guaranteed upfront payment of $75 million (approximately KRW 110 billion) from Lilly. The company is also eligible to receive up to an additional $1.185 billion (approximately KRW 1.8 trillion) upon achieving clinical development, regulatory approval, and commercialization milestones. Hanmi Pharmaceutical will also receive separate tiered royalties following the product launch.

Under this agreement, Lilly secures exclusive global rights for the development, manufacturing, and commercialization of sonefpeglutide, excluding South Korea.

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Sonefpeglutide is a novel drug candidate developed utilizing LAPSCOVERY, Hanmi Pharmaceutical’s proprietary long-acting platform technology for biologics. Focusing on the biological effects of glucagon-like peptide-2 (GLP-2), including the promotion of intestinal growth, alleviation of inflammation, and protection and regeneration of the intestinal mucosa. Hanmi has conducted various non-clinical studies. The candidate is currently undergoing global Phase II clinical trials for the indication of Short Bowel Syndrome (SBS). Hanmi Pharmaceutical will continue the ongoing global Phase II trial for SBS until its completion, after which Lilly will advance subsequent clinical trials based on the non-clinical and clinical data for sonefpeglutide.

This novel drug out-licensing deal between Hanmi Pharmaceutical and Lilly marks the first time in 11 years. In 2015, Hanmi out-licensed its BTK inhibitor, poseltinib, to Lilly for an upfront payment of $50 million. BTK inhibitors act by blocking Bruton's Tyrosine Kinase (BTK), a protein critical to B-cell development. Lilly returned the poseltinib rights in January 2019, citing a failure to demonstrate efficacy in a Phase II clinical trial for patients with rheumatoid arthritis.

The upfront payment secured by Hanmi Pharmaceutical through this deal ranks in the top 10 among the past out-licensing agreements signed by domestic pharma and biotech firms. Hanmi Pharmaceutical also holds the record for the largest upfront payment in a technology transfer by a domestic company.

In November 2015, Hanmi Pharmaceutical signed an out-licensing agreement with Sanofi for three novel diabetes treatments (efpeglenatide, long-acting insulin, and an efpeglenatide + long-acting insulin combination). The initial upfront payment was valued at EUR 400 million. Although the upfront fee was subsequently reduced to EUR 204 million through an amended contract, it still holds the top spot for historical upfront payments. The long-acting obesity and diabetes treatment that Hanmi out-licensed to Janssen in 2015 for $105 million ranks second on record. 

The $100 million upfront payment received by SK Biopharmaceuticals in February 2019, when it signed a technology transfer agreement with Arvelle Therapeutics for the epilepsy treatment 'cenobamate,' ranks third historically. The $100 million in upfront fees secured in novel drug licensing deals by companies such as LG Chem, LigaChem Biosciences, and Orum Therapeutics also rank third-highest in historical upfront payments.

In January 2024, LG Chem signed a technology transfer agreement with U.S.-based Rhythm Pharmaceuticals for its rare obesity drug candidate, LB54640. The terms of the deal included a $100 million upfront payment, with the total deal value reaching up to $305 million. LB54640 is the world's first oral MC4R agonist, and its Phase I clinical trials confirmed safety as well as a trend toward dose-dependent weight loss.

In December 2023, LigaChem Biosciences signed a technology transfer agreement with Janssen Biotech for the development and commercialization of ‘LCB84’. The contract terms stipulated a $100 million upfront payment, a $200 million option exercise fee for sole development, and development, regulatory, and commercialization milestones, bringing the total potential value up to $1.7 billion. LCB84 is an antibody-drug conjugate (ADC) utilizing LigaChem Bio’s next-generation ADC platform technology and a Trop2 antibody in-licensed from Mediterranea Pharma.

In November 2023, Orum Therapeutics signed an out-licensing deal with BMS for its novel drug candidate, ORM-6151. The total contract value reached up to $180 million, including a $100 million upfront payment. ORM-6151 is a candidate developed via Orum Therapeutics' proprietary antibody-based protein degrader platform.

Chong Kun Dang signed an out-licensing deal with Novartis in November 2023 for its candidate, CKD-510; the $80 million non-refundable upfront payment ranks seventh historically. Factoring in $1.225 billion in development and regulatory milestones, the total deal value scales up to $1.305 billion. CKD-510 is a novel drug candidate discovered and developed by Chong Kun Dang, a highly selective HDAC6 inhibitor engineered with a non-hydroxamic acid platform.

Hanmi Pharmaceutical received an upfront payment of $80 million under its 2016 deal with Genentech to transfer its RAF-targeted anticancer technology. In January 2022, ABL Bio secured a non-refundable upfront fee of $75 million upon signing a technology transfer agreement with Sanofi subsidiary Genzyme for ABL301, a bispecific antibody candidate targeting degenerative neurological disorders such as Parkinson's disease.

Hanmi Pharmaceutical received upfront fees of $50 million each in its 2015 out-licensing agreements with Eli Lilly and Boehringer Ingelheim. The $50 million upfront payment secured by Yuhan Corporation in 2018 when it out-licensed the oncology drug Leclaza to Janssen also ranks among the highest tiers.

Upfront fee accounts for 6% of total deal value...among the highest levels in recent tech transfers

The upfront payment secured through Hanmi Pharmaceutical's latest technology transfer accounts for 6.0% of the total deal value. This represents a highly remarkable proportion, even when compared with historical out-licensing deals.

Last year, only one technology transfer deal by a Korean pharma or biotech company achieved an upfront payment proportion exceeding 6.0%, and that was an out-licensing agreement by Hanmi Pharmaceutical.

In September of last year, Hanmi Pharmaceutical signed a global technology transfer agreement granting exclusive global development and commercialization rights for ‘Encequidar’ alongside Gilead Sciences and Health Hope Pharma. Under this deal, Health Hope Pharma, which held the global rights to Encequidar outside of Korea, modified its existing strategic collaboration with Hanmi Pharmaceutical to grant Gilead an exclusive global license for product development, manufacturing, and commercialization within the field of virology. Hanmi Pharmaceutical received a non-refundable upfront payment of $2.5 million. Milestone payments tied to development stages were capped at up to $32 million. Although the upfront payment accounted for 7.8% of the total contract value in this instance, the absolute dollar amount of the upfront fee was relatively small.

2025 Out-licensing deals by pharmaceutical and biotech companies. UPFRONT PAYMENT (KRW 100 million); TOTAL CONTRACT VALUE (KRW 100 million)

Since last year, out-licensing of novel drug candidates has been highly active, driven primarily by biotech firms such as AimedBio, OliX Pharmaceuticals, AbClon, Alteogen, Genome & Company, ABL Bio, Rznomics, NIBEC, Abion, Sovargen, and G2GBio. However, the proportion of upfront payments in these deals remained negligible.

In March of last year, Alteogen signed two agreements with MedImmune, the research and development (R&D) subsidiary of AstraZeneca, utilizing its proprietary 'ALT-B4' platform technology. The contract signed with the UK entity was valued at KRW 1.091 trillion, including an upfront payment of KRW 36.4 billion. The contract with the US entity totaled KRW 872.9 billion, including a KRW 29.1 billion upfront payment; for both agreements, the upfront fee accounted for 3.3% of the total contract value.

The upfront fees for out-licensing deals signed by ABL Bio, NIBEC, and Abion were limited to 1% of their respective. Companies including AimedBio, OliX Pharmaceuticals, AbClon, Genome & Company, Rznomics, Sovargen, and G2GBio did not disclose the values of their upfront payments.

The proportion of an upfront payment relative to the total value of a pharma or biotech out-licensing agreement varies widely. Typically, the closer a novel drug candidate is to commercialization, the higher the upfront fee percentage.

The $100 million upfront fee received by Orum Therapeutics from BMS reached 55.6% of the total deal value. Orum Therapeutics’ technology transfer stands out as an example where the upfront payment swelled due to the outright assignment of the novel drug candidate. While conventional pharmaceutical licensing agreements structure payments around milestones triggered by future clinical advancement, Orum Therapeutics significantly maximized its upfront component by fully assigning its rights.

The upfront payment for LG Chem’s LB54640 technology transfer accounted for 32.8% of the maximum potential deal value. This indicates that the licensing partner evaluated the growth potential of LB54640 exceptionally highly, allocating a substantial upfront investment.

In 2019, the upfront fee proportion for cenobamate, which SK Biopharmaceuticals out-licensed to Arvelle Therapeutics, formed an exceptionally high baseline at 18.9%. Analysts attribute this high-purity contract structure to the elevated probability of commercialization, as cenobamate had already entered the review pipeline at the U.S. Food and Drug Administration (FDA) at the time of the deal.

For the three novel diabetes treatments out-licensed to Sanofi by Hanmi Pharmaceutical, which holds the record for the largest upfront fee, the initial upfront component stood at 10.3% of the deal. When the total value of the agreement between Hanmi and Sanofi was subsequently scaled down via an amended contract, the upfront proportion dropped to 7.2%. The long-acting obesity and diabetes treatment that Hanmi out-licensed to Janssen in 2015 also recorded a high upfront proportion of 11.5%. At the time of that technology transfer, the candidate had just wrapped up Phase I clinical testing. Despite being in an early stage of clinical development, the licensing partner assigned an exceptionally high valuation to the asset.

In 2020, Alteogen signed a non-exclusive license agreement for its proprietary human hyaluronidase technology (ALT-B4) with a global pharma, with a maximum value of $38.65 billion. However, the deal's upfront payment was $16 million, representing only 0.4% of the potential maximum deal size.