Celltrion Expands Beyond Biosimilars with $744M Deal for Autoimmune Drug Candidates

Korean biosimilar specialist Celltrion has entered into a significant agreement with U.S. biotech Kaigene, potentially worth over $740 million, for two preclinical autoimmune assets. This move marks a strategic shift for Celltrion as it looks to diversify its portfolio beyond biosimilars.

Deal Structure and Financial Terms

Celltrion will pay an upfront fee of $8 million to Kaigene, with the potential for up to $736 million in milestone payments, including $11 million in near-term milestones. The agreement also includes tiered royalties on net sales for Kaigene should either drug reach the market.

In exchange, Celltrion gains worldwide rights to KG002 and rights to KG006 in all territories except greater China and Japan. This deal structure allows Celltrion to expand its global presence while retaining significant market access.

Novel Autoimmune Drug Candidates

KG006: Next-Generation FcRn Inhibitor

One of the acquired assets, KG006, is described as a next-generation FcRn inhibitor. Kaigene has highlighted its "novel antibody structure," which reportedly offers extended durability and potential best-in-class efficacy compared to existing therapies.

FcRn inhibitors have shown promise in treating chronic autoimmune diseases, particularly generalized myasthenia gravis. Notable examples in this class include argenx's Vyvgart Hytrulo, UCB's Rystiggo, and Johnson & Johnson's Imaavy.

KG002: Dual-Acting Antibody

The second asset, KG002, is a dual-acting antibody with a unique mechanism of action. It selectively degrades disease-specific autoantibodies while simultaneously suppressing disease-specific B cells in certain autoimmune disorders. This novel approach could potentially offer improved efficacy and safety profiles in treating autoimmune conditions.

Strategic Implications for Celltrion

This deal represents a significant shift in Celltrion's business strategy, which has previously focused almost exclusively on biosimilars. By acquiring these innovative autoimmune drug candidates, Celltrion is positioning itself to compete in the lucrative autoimmune disease market with potentially first-in-class therapies.

Minjae Shin, CEO of Kaigene, expressed confidence in the partnership, stating, "We believe that Celltrion, with its world-class infrastructure and fully integrated capabilities across manufacturing, clinical development, regulatory approval, and global commercialization of antibody therapeutics, is the ideal partner to bring Kaigene's innovations to patients worldwide."

While specific autoimmune indications for these drug candidates have not been disclosed, the deal underscores Celltrion's commitment to expanding its pipeline beyond biosimilars and into novel therapeutics. This move aligns with the company's recent acquisition of Eli Lilly's drug substance plant in Branchburg, New Jersey, further strengthening its manufacturing capabilities in anticipation of future growth.