Contents

• [How it began] CAGE inside cancer cells

  Jeon founded L-Base in November 2015. Before starting his own business, he worked for approximately 30 years in new drug R&D, most notably as the chief researcher at AmorePacific R&D Center; and as the director of business development and strategic planning at Pacific Pharmaceuticals Co. 
  
  His brother's death from leukemia was a turning point for Jeon. Less than a year after being diagnosed with the disease in 2002, his brother died from it. “After seeing my brother struggle with the type of cancer found in blood and bone marrow, drug R&D was no longer just a job for me and motivated me to develop a new medicine that would advance chemotherapy,” said Jeon.
  
  As luck would have it, Professor Jeong Doo-il, Jeon's friend at Kangwon National University’s department of biochemistry, discovered a new cancer/testis antigen (CTA), called the cancer associated gene (CAGE) in 2002. 
  
  CTAs are immunogenic, highly cancer-specific, and frequently expressed in various types of cancer. They are the most common in lung cancer but are also present in pancreatic cancer, colon cancer, and breast cancer.
  
  “Finding a CTA is like getting a hint on which cell is cancerous,” Jeon explained. “Because different types of cancer have different CTAs, cancers in which CTAs can be detected are easier to treat when it comes to developing targeted therapies.”
  
  Thanks to Jeon's existing relationship with Professor Jeong, Jeon was able to receive the relevant CAGE technology that allowed him to establish L-Base.

• [New drug candidate] Development of LB217

  The most important new drug candidate that L-Base is developing is LB217. It is the material that ensures that CAGE, which comes from non-small cell lung cancer (NSCLC), blocks a drug's resistance. Patients who have resistance to EGFR TKI, which is a treatment for NSCLC, can use LB217 to decrease or even eradicate their resistance to EGFR TKI. 
  
  LB217 is based on an autophagy inhibitor. Autophagy is the natural, conserved degradation of the cell that removes unnecessary or dysfunctional components through a lysosome-dependent regulated mechanism. It allows the orderly degradation and recycling of cellular components.
  
  

  

  The problem is that works to boost cancer cells as well as healthy cells. In the beginning, it only works on regular cells to restrain the growth of cancer cells. But it could also exponentially grow cells if they have already turned cancerous. In a case like this, if anticancer drugs are administered for a long period, the patient will grow resistant to them.

• [Technological strengths] Collaborations with global pharma giants

  LB217 is the world’s first new drug candidate for cancer-specific autophagy inhibitors. In 2018, the company proved that CAGE could create resistance to NSCLC treatment through autophagy.
  
  Many global pharmaceutical companies and biotech firms have repeatedly tried to create products to restrain the autophagy of cancer cells but the negative side effects have been so severe it has hindered development. 
  
  Jeon explained that since CAGE is an antigen that only reveals itself in a cancerous environment, LB217 does not hinder the phagocytosis of regular cells. He does not expect to see any negative side effects from the use. 
  
   “L-Base’s new drug candidate is the first drug in the world that can restrain the autophagy of cancer cells by combining CAGE,” said Jeon. 
  
  

  

  While NSCL drugs make up the largest portion of the entire cancer treatment industry, there are fewer treatments available on the market compared to other cancer treatments. Targeted therapies are the mainstream, namely Tagrisso (Osimertinib), Tarceva (Erlotinib), Irresa (Gefitinib), and Giotrif (Afatinib). 
  
  “LB217 wants to provide a new and effective treatment option for the lung cancer patients who have suffered from resistance to existing treatments,” Jeon said. The CEO explained as such: “For global pharmaceutical firms that produce targeted therapies or immuno-oncology, LB217 can be used alongside existing treatments. For the pharmaceutical companies that want to expand into the lung cancer treatment market, it offers an attractive option for a stronger pipeline.”
  
  LB217 has completed pre-clinical trials and aims to complete phase 1 and phase 2 clinical trials in South Korea and abroad within the next five years.

• [Revenue model] Licensing out LB217

  As L-Base is still in the development phase of new drug candidates, it is not yet generating revenue. 
  
  

  

  If and when the final development of LB217 and its commercialization is successful, the company plans to generate revenue through technology transfers to and licensing out to multinational pharmaceutical giants and global biotech companies. It also plans to conduct joint research alongside the bigger players. 

  L-Base's potential client base falls into four categories.
  
  The first is pharmaceutical companies that already possess epidermal growth factor receptor tyrosine kinase inhibitors (EGFR TKI). Biopharmaceutical companies are always on the lookout for new lung cancer treatments, especially for NSCLC, to strengthen their pipelines. Treatment for lung cancer makes up the largest segment of the chemotherapy market. These companies are often in need of finding a combination of drugs to expand their own NSCLC treatment offerings. 
  
  In the second category are biopharmaceutical companies that wish to enter the NSCLS market. Many global pharmaceutical and biotech firms have tirelessly attempted to develop drugs that suppress the workings of autophagy in cancer cells. 
  
  LB217 is the world’s first drug that can suppress cancer-specific autophagy by combining CAGE found in cancer cells. The company is promoting this unique trait to clients and gaining the attention of multinational companies.
  
  The third category are solutions to overcome the resistance to existing treatments, which have high expectations for autophagy inhibitors. 
  
  The last category is companies that already produce immuno-oncology products. Since 2010, a number of third-generation immuno-oncology products have been released and subsequently dominated the market. However, drug resistance problems persist and negatively affect anticancer drugs. L-Base is confident that it can increase the effectiveness of existing chemotherapy through a mechanism-based combination strategy and develop a new material that can improve the effectiveness of immuno-oncology, also known as a checkpoint inhibitor. 
  
  When LB217's phase 1 clinical trials are completed in 2025, the company hopes to license out the material. L-Base's revenue is expected to be generated first through deposits until 2031, then phased technical fees, and then other types of royalty fees following the product’s official launch. 
  
  L-Base plans to explain the positives of its drugs to potential partners at chemotherapy conferences. It also plans to utilize firms that specialize in biopharma licensing deals – to effectively contact licensee candidates, set deal strategies, prepare deal packages, negotiate, conduct due diligence, and eventually seal the deals.

• [Team building] Building networks based on experience

  CEO Jeon fully utilized his experience and has recruited talent using his extensive professional network and colleague recommendations. He also used a specialized channel for biotech experts to build his team. 
  
  Choi Sung-yeol is the chief financial officer, who formerly worked as a senior consultant at Arthur Andersen and as business development director at SK D&D. Choi has more than 10 years of experience in overseas trade. 
  
  Lee Jee-young, director of business development, also has more than a decade of experience at a pharmaceutical conglomerate. 
  
  To oversee the global network, Joe Kim heads the L-Base’s United Kingdom office. The Imperial College London graduate has more than 20 years' startup accelerator experience, notably as the head of IBM Asia Technical Service and as the founder of the startup accelerator XnTree. 
  
  Mong Chang-hoon, director of research, has expansive experience in cancer treatment research as a professor at the University of Ulsan.
  
  “We are a startup without revenue yet and the development of new drugs typically takes more than 10 years,” Jeon said. “We prefer employees who always ask themselves why the new drug is needed and who will work as a researcher with a sense of calling.”
  
  Regarding technical specifications, Jeon answered that he mostly hires those with subject area expertise and experience and prefers “people who have the capacity and patience to approach yet-to-be-resolved issues logically.”

• [Scalability] Pipeline diversification

  L-Base’s new drug based on CAGE can be applied to a wide range of anticancer treatments. CAGE is present in not just lung cancer but also in cancers of pancreatic, breast, and colorectal. 
  
  LB217 is administered mainly for lung cancer and colorectal cancer. Lung cancer has the largest anticancer treatment market around the world. In developed countries, lung cancer is the biggest killer of cancer patients. The lung cancer treatment market worldwide is forecast to grow to $46.2 billion in 2028 from the previous $23 billion seen in 2020, according to a report by the Market Research World published in February. 
  
  The upcoming new drug candidates are also expected to be used for those with resistance to existing anticancer drugs. LB319 will be used for treating breast cancer, while LB409 will be used to treat leukemia. LB509 will be for patients with pancreatic cancer.

• [Challenges] Long-term commitments

  Industry insiders say the fact that a Korean startup entered the new drug development market, an extremely difficult sector to succeed in even for global biopharma giants, is laudable in and of itself. It isn’t easy for a startup to immerse itself in a sector with more than a decade of investment. 
  
  “Venture capital firms in South Korea are still wary of pharmaceutical and bio industries,” said Jeon. “This is because certain biotech companies have wreaked havoc in the stock market and other biopharma companies did not perform in line with expectations.” 
  
  Jeon explained that since only a handful of pharmaceutical startups have succeeded in South Korea, VCs are not used to this sector. “The VCs that have invested in us are not looking for an immediate return.”
  
  He added that startups themselves must have a thorough understanding of the market. Jeon said that those who have only worked in research and development tend not to take market supply and demand into consideration.
  
  “There is a need to observe market trends for global anticancer drugs, and to calculate supply and demand with a cold heart,” Jeon said. 
  
  “L-Base is not creating a new market but targeting the chronic issue of drug resistance,” Jeon said. “As a startup, we are learning about the market and it will be our constant task and biggest challenge to simultaneously embrace both new candidate development and revenue generation.”