LG Chem to invest $1.6 billion in biopharmaceuticals by 2027

LG Chem will invest 2 trillion won ($1.6 billion) in its biopharmaceuticals business by the end of 2027, aiming to become a major player in the U.S. anticancer market.

LG Chem CEO Shin Hak-cheol, fourth from left in the front row, and AVEO Pharmaceuticals CEO Michael Bailey, fifth from left, take a photo. LG Chem will finalize its acquisition of the Nasdaq-listed company on Friday. [LG CHEM]

LG Chem will invest 2 trillion won ($1.6 billion) in its biopharmaceuticals business by the end of 2027, aiming to become a major player in the U.S. anticancer market.

The investment plan was announced Thursday, a day before it finalizes the acquisition of Nasdaq-listed AVEO Pharmaceuticals for $571 million. The purchase will be handled by LG Chem Life Science Innovation Center, LG Chem's wholly-owned U.S. subsidiary.

With the latest investment in R&D, LG Chem aims to introduce at least four new drugs targeting cancers and metabolic diseases by the end of 2030.

"We will focus on getting AVEO the foothold to lead our anticancer business for the goal of becoming one of the top 30 biopharmaceutical companies by maximizing the synergy effects," said LG Chem CEO Shin Hak-cheol.

"Through the latest acquisition, LG Chem is now a step closer to realizing our vision, which is to offer humans a better life through science and innovation."

Established in 2002 in Boston, AVEO Pharmaceuticals is a pharmaceutical company specializing in cancer treatments. It developed Fotivda, a treatment for kidney cancer, and acquired use approval from the U.S. Food and Drug Administration (FDA) in 2021.

The drug generated 130 billion won in sales last year, with the sales expected to increase to 210 billion won this year, LG Chem said. AVEO is currently in clinical trials to expand the range of the drug.

When the acquisition is completed, AVEO will handle LG Chem's cancer treatment candidates. LG will focus on discovering substances and preclinical trials, while AVEO will further conduct trials and market them.

LG Chem has 20 drugs that are in preclinical trials or clinical trials. Of them, nine are cancer treatments.

Earlier last year, LG Chem announced its goal to log about 2 trillion won in revenue in the biopharmaceutical business alone by 2027.

The size of global anticancer drug market, which was 250 trillion won in 2021, is expected to grow at an annual rate of 10.4 percent to reach 410 trillion won in 2026. The U.S. market has over a 40-percent share.

BY SARAH CHEA [chea.sarah@joongang.co.kr]