South Korea’s Orion Group, renowned for its snack and confectionery products, is taking a significant leap into the biopharmaceutical market with the purchase of a 25.73% controlling stake in LegoChem Biosciences Inc. This acquisition, valued at 548.5 billion won ($415 million), positions Orion as the largest shareholder in the biotech startup, which specializes in antibody-drug conjugate (ADC) development.
Orion’s investment includes buying shares from LegoChem’s founder and CEO, Kim Yong-zu, and another shareholder, along with additional new shares. The purchase price per share is set at 56,186 won, marginally higher than LegoChem’s closing price on the day of the announcement. This move aligns with Orion’s broader strategy, which, fueled by 1 trillion won in cash reserves, focuses on mergers and acquisitions in three key areas: biopharmaceuticals, convenience meal replacements, and bottled water.
Orion’s journey into the biopharmaceutical sector has been marked by strategic alliances and joint ventures. Notable collaborations include a joint venture in China with Shandong Lukang Pharmaceutical GroupMedicine in 2021 and the establishment of Orion Biologics in partnership with HysensBio Co. in 2022. This shift in focus also led to Orion divesting its construction units.
The acquisition of LegoChem, founded in 2006, is a strategic move for Orion. LegoChem has garnered attention for signing a $1.7 billion licensing agreement with Janssen Biotech Inc., a Johnson & Johnson unit, for the development and commercialization of its ADC, LCB84, currently in early-stage clinical trials. This deal represents the largest technology license agreement for a single substance by a Korean pharmaceutical company.
Orion’s commitment to LegoChem involves providing comprehensive support for R&D and global marketing, while allowing the biotech firm to maintain autonomy in its operations. Hur In-cheol, vice chairman and CEO of Orion Holdings Corp., emphasized in a statement to The Korea Economic Daily that Orion’s investment will bolster LegoChem’s goal to become a world-class new-drug development company.
This acquisition is not only a significant step for Orion in diversifying its portfolio but also a strategic investment in the promising field of ADC cancer treatments. ADCs, known for their targeted approach and minimized side effects in cancer therapy, represent a rapidly growing sector within the pharmaceutical industry, with the global market projected to expand significantly by 2029. Orion’s move into this sector reflects an acute awareness of the evolving landscape in health-related markets, blurring the lines between food and biopharmaceutical products.
