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[Kim Jinsoo, Edaily Reporter] HLB Group shares plunged on Thursday after the U.S. Food and Drug Administration (FDA) rejected the company’s application to market its liver cancer treatment. HLB said it will resubmit the application after addressing the FDA’s latest request for additional information.

However, with Bristol Myers Squibb (BMS) expected to gain FDA approval next month for its Opdivo-Yervoy combination therapy, HLB is seen as falling behind in the race, potentially weakening its competitive edge.

Jin Yang-gon HLB Group Chairman. (Kim Seami, Edaily Reporter)

According to MP Doctor (formerly MarketPoint) via KG Zeroin, shares of HLB, HLB Life Science, and HLB Pharma all hit the lower trading limit at market open. HLB dropped 19,900 won to close at 46,500 won, HLB Life Science fell 2,560 won to 5,990 won, and HLB Pharma declined 7,300 won to 17,100 won. Other group affiliates, including HLB Genexine, HLB Biostep, and HLB Panagene, also fell by about 15%.

The sell-off came after the FDA declined to approve the combination of rivoceranib and camrelizumab (branded as “Rivocamrel”) for liver cancer treatment. HLB Group Chairman Jin Yang-gon announced in a YouTube video at 3 a.m. that the FDA had issued a second complete response letter (CRL) at 11:37 p.m. Korea time.

Shares of HLB, HLB Life Science, and HLB Pharma were hit hardest due to their direct involvement in the development and commercialization of Rivocamrel. HLB holds the global patent rights for rivoceranib, HLB Life Science owns marketing and profit rights for Korea, Europe, and Japan, and HLB Pharma holds the exclusive sales rights in South Korea.

Second CRL Issued; Approval Hoped for by July

HLB had applied for FDA approval of Rivocamrel as a first-line treatment for liver cancer. The company received its first CRL in May 2023 and has now received a second.

“In the first CRL, the FDA raised issues related to camrelizumab’s chemistry, manufacturing and controls (CMC) and bioresearch monitoring (BIMO),” Jin said in an online briefing. “The second CRL was due to unresolved CMC issues for camrelizumab.”

He added that Jiangsu Hengrui Medicine, the developer of camrelizumab, would work quickly with the FDA to clarify the requirements and resubmit the application. HLB expects a final decision as early as July, with a delay of no more than two months.

HLB Falls Behind in Speed Race; BMS Approval Likely Next Month

With Rivocamrel’s FDA approval now delayed, BMS is likely to be the first to market with its Opdivo-Yervoy combination, HLB’s primary competitor in the liver cancer space.

According to BMS, the Opdivo-Yervoy combo showed a median overall survival (OS) of 23.7 months?significantly higher than the control group (treated with lenvatinib or sorafenib), which showed a median OS of 20.6 months.

The FDA is scheduled to decide on BMS‘s application by April 21. The combination was already approved in Europe on March 11, making U.S. approval highly likely barring any major issues.

HLB had hoped to beat BMS to market but now finds itself trailing in the approval timeline.

HLB Stresses Rivocamrel’s Differentiated Strengths

Despite the delay, HLB’s Chief Technology Officer Han Yong-hae said Rivocamrel’s unique mechanism of action could help it gain market share over time.

“Rivocamrel is fundamentally different from the Opdivo-Yervoy combo, combining angiogenesis inhibition with immunotherapy,” he said. “Opdivo and Yervoy, as immune checkpoint inhibitors, have inherent limitations.”

While the Opdivo-Yervoy combo showed strong median OS data, Han pointed out that its first-year survival rates were actually worse than the control group, likely due to immune-related adverse events from Yervoy. He noted that these side effects are often managed with steroids, which can blunt the immune response and reduce drug efficacy.

Han also emphasized that HLB’s trial included more than 50% of patients aged 65 or older, while BMS may have included patients with less advanced disease.

“Given the safety and efficacy profiles, and our different mechanism of action, we believe Rivocamrel can coexist in the market without directly clashing with Opdivo-Yervoy,” he said.

CG Invites Drops Following Indirect Impact From Rivocamrel FDA Setback

The U.S. FDA’s decision not to approve HLB’s cancer drug rivocamrel had a ripple effect on CG Invites’ stock. On the same day, shares of CG Invites fell as much as 11.40% during early trading and closed down 4.09% at 2,230 won.

CG Invites holds exclusive domestic rights to all indications of camrelizumab, an anti-PD-1 immune checkpoint inhibitor developed by China’s Jiangsu Hengrui Pharmaceuticals. Last year, the company signed a collaboration agreement with HLB for the joint development and commercialization of camrelizumab.

Currently, CG Invites is conducting bridging trials at eight hospitals in South Korea, including Asan Medical Center, targeting non-small cell lung cancer patients. The company had anticipated that FDA approval of rivocamrel would positively affect its own plans for domestic market entry. However, with the drug’s approval denied, CG Invites’ shares took a hit.

“There are no issues within the company itself. The stock dropped in response to the delay in HLB’s FDA approval,” said a CG Invites spokesperson. “Although the price plummeted early in the session, it showed signs of recovery later in the day.”

Abclone Hits Lower Limit After Audit Report Delay

Shares of Abclone hit the daily limit down on Thursday, closing at 8,050 won, after the company failed to meet the deadline for submitting its audit report.

On March 21, Abclone announced in a regulatory filing that its audit report would be delayed. According to the filing, external auditors are required to submit the audit report at least one week prior to the company’s annual shareholders’ meeting.

With Abclone’s 15th regular general meeting scheduled for March 31, the audit report was due by that date. However, submission was delayed due to the company’s failure to provide additional documentation required by the auditors to finalize their opinion.

Abclone said it will disclose the report as soon as it is received from the external auditor.