LG Chem Expands Technology-Transfer Deal for Rare Obesity Drug to KRW 1.15 Trillion

[Financial News] LG Chem has expanded the value of its technology-transfer deal for a rare-obesity drug with U.S.-based rare-disease specialist Rhythm Pharmaceuticals to at least KRW 1 trillion. Based on clinical results, it has reassessed the drug’s value and laid the groundwork for securing additional revenue.
LG Chem said on the 3rd that it had amended its agreement with Rhythm Pharmaceuticals for the global development and commercialization of Bivamelagon, an oral candidate for treating rare obesity.
Bivamelagon is a drug candidate that LG Chem developed in-house and licensed to Rhythm Pharmaceuticals in January 2024 at the Phase 1 stage. It works by activating the brain receptor MC4R, which is involved in appetite regulation, and is being developed to treat rare forms of obesity, including hypothalamic obesity caused by brain damage and other factors.
Rhythm Pharmaceuticals secured positive results in a Phase 2 trial involving patients with hypothalamic obesity and is preparing to enter global Phase 3 trials this year.
With the amendment, the total deal value increased from $305 million to $855 million (approximately KRW 1.15 trillion). LG Chem will receive additional upfront payments totaling $350 million (approximately KRW 470 billion) over four years, from 2026 through 2029. The value of milestone payments tied to targets at the development, regulatory approval and sales stages also increased by $200 million.
The revenue-sharing structure was also adjusted. Previously, the royalty rate increased according to the number of approved indications for Bivamelagon, based on total sales of Rhythm Pharmaceuticals’ MC4R-class therapies. Under the amendment, the royalty rate is fixed at 1%. Royalty payments will begin in January 2029, but if the product launches earlier, they will apply from the time of its first sales. The two companies may also agree each year to convert some upfront payments into royalties.
Ji-woong Sohn, president of LG Chem’s Life Sciences business, said, “This agreement reflects both companies’ confidence in Bivamelagon’s value and potential. We will expand global development so that we can quickly provide patients with rare obesity with new treatment options.”
[email protected] Jung Sang-hee Reporter