LG Chem Expands Rare Obesity Drug Licensing Deal to 1.15 Trillion Won

Amends Vibamelagon Deal with U.S.-Based Rhythm Pharmaceuticals
Secures Additional 470 Billion Won in Upfront Payments Through 2029

LG Chem has increased the value of its licensing deal for a rare obesity treatment with a U.S. biotech company to 1.15 trillion won. After securing positive results in a Phase 2 trial, the company revised the contract terms ahead of the candidate’s entry into global Phase 3 trials.

LG Chem said on November 3 that it had amended its licensing agreement with U.S.-based rare disease biotech company Rhythm Pharmaceuticals for the global development and commercialization of Vibamelagon, an oral candidate for the treatment of rare obesity.

Vibamelagon is an oral melanocortin-4 receptor (MC4R) agonist developed in-house by LG Chem. The drug candidate acts on appetite-regulation pathways in the brain and is being developed to treat rare forms of obesity, including hypothalamic obesity. LG Chem licensed Vibamelagon to Rhythm Pharmaceuticals in January 2024 while it was in Phase 1 trials. Rhythm Pharmaceuticals subsequently conducted a Phase 2 trial in patients with hypothalamic obesity and secured positive results. It is preparing to begin global Phase 3 trials by the end of this year.

Under the amendment, the total deal value has increased approximately 2.8-fold, from $305 million (approximately 410 billion won) to $855 million (approximately 1.15 trillion won). LG Chem will receive an additional $350 million (approximately 470 billion won) in upfront payments over four years, from this year through 2029. Milestone payments tied to development, regulatory approval and sales have also increased by $200 million. The criteria for achieving milestones have been eased, increasing the likelihood of securing revenue. The two companies may also agree each year to convert upfront payments into royalties.

In addition, the companies will retain the existing arrangement under which payments are calculated based on total sales of Rhythm Pharmaceuticals’ MC4R-class treatments, but have changed the royalty rate. Previously, the rate rose from the low to mid-single digits depending on the number of approved indications for Vibamelagon. Going forward, a fixed rate of 1% will apply. Royalty payments will begin in January 2029, or from the first sales if Vibamelagon launches earlier.

Rhythm Pharmaceuticals CEO David Meeker said,  "This amendment reflects the company’s strong conviction that Vibamelagon can deliver meaningful therapeutic benefits to patients with rare obesity, and will help accelerate its global development and commercialization." 

Son Jiwoong, president of LG Chem’s Life Sciences Company, said, "This agreement reflects both companies’ confidence in Vibamelagon’s value and potential. We expect that expanding global development will help bring innovative treatment options to patients with rare obesity as soon as possible."

This content was produced with the assistance of AI translation services.