LG Chem out-licenses obesity drug candidate to US firm

LG Chem Ltd. has agreed to license out a rare genetic obesity drug candidate in phase 2 clinical trials to Rhythm Pharmaceuticals Inc., a US biotech company, for up to $350 million, the two companies said on Thursday.

Under the agreement, LG will receive $100 million up front from Rhythm Pharmaceuticals to license its oral small molecule melanocortin-4 receptor (MC4R) agonist LB54640.

LG said the material demonstrated an appetite suppression effect and weight reduction in phase 1 trials.

In addition to the upfront payment, LG will also receive up to $250 million from the Nasdaq-listed company, contingent on the drug candidate achieving certain regulatory approvals and hitting sales milestones, as well as sales royalties.

A rare form of genetic obesity is caused by poor appetite control due to abnormalities in the pathway of MC4R, a gene that sends a satiety signal. The symptoms usually appear in childhood.

LB54640 is under development as a treatment for MC4R pathway diseases.

"The early data from LG Chem suggest they have identified a specific therapy for the MC4R without hyperpigmentation or cardiovascular side effects," David Meeker, CEO of Rhythm Pharmaceuticals, said in a statement.

LB54640 has received orphan drug designation from the US Food and Drug Administration (FDA), granted to a rare disease treatment to sponsor its clinical trials with tax credits.

After the out-licensing agreement, Rhythm Pharmaceuticals will take charge of two phase 2 studies to evaluate the weight loss efficacy, safety, tolerability and pharmacokinetics of LB54640.

LG said LB54640 will make quick progress in clinical development with a wider pool of patients for clinical tests in the US.

LG had planned to submit its new drug application to the FDA in 2026, under its original development timeline released in 2020.

Founded in 2010, Rhythm Pharmaceuticals has developed and commercialized Imcivree, the first and only FDA-approved treatment to target an impaired MC4R pathway in the brain, a root cause of abnormal hunger and obesity.

Last year, LG Chem completed its $571 million purchase of the US biotech firm AVEO Pharmaceuticals Inc. to strengthen its anti-cancer drug portfolio and accelerate its foray into the US market.

Write to Ji-Hyun Lee at bluesky@hankyung.com

Yeonhee Kim edited this article.