South Korea-based LG Chem has signed a definitive agreement to acquire oncology-focussed biopharmaceutical firm AVEO Oncology for $566m in an all-cash deal.
As per the terms of the deal, LG Chem will offer shareholders of the American publicly-listed company $15 per share.
AVEO president and CEO Michael Bailey said: “By joining forces with LG Chem, AVEO expects to have significant financial and development resources to help AVEO fully realize the tremendous potential of our promising pipeline.
“LG Chem shares AVEO’s deep commitment to patients and vision of developing innovative therapies designed to provide substantial impact in the lives of cancer patients with clear unmet medical needs.”
According to LG Chem, the combination of its life sciences unit and AVEO is expected to result in a global oncology organisation with a strong product portfolio.
The South Korean company said that the acquisition will extend the commercial presence of the life sciences division to the US and diversifies its pipeline with a range of new oncology therapies. It will also speed up the creation and marketing of top-tier cancer treatments.
Under the deal, AVEO will build the commercial footprint of LG Chem in the oncology field through its FOTIVDA (tivozanib) product. The biopharmaceutical firm received US Food and Drug Administration (FDA) approval in March 2021 for FOTIVDA for the treatment of relapsed or refractory advanced renal cell carcinoma (RCC) in adults who had two or more systemic therapies in the past.
Upon completion of the deal, which is expected by early 2023, AVEO will operate as the commercial foundation for the oncology division of LG Chem’s life sciences business.
LG Chem chief executive officer Shin Hak-Cheol said: “With its track record of clinical success, deep pipeline of innovative therapies and continued growth trajectory following the successful commercialisation of FOTIVDA, AVEO is the perfect partner for LG Chem Life Sciences.
“This transaction represents the next step in our portfolio transformation towards higher growth markets and provides a strong commercial foundation in oncology as we continue to develop our anti-cancer offerings.
“We remain focused on prudently investing in our R&D capabilities, continuing to build a leading portfolio of therapies and transforming lives through inspiring science and leading innovation.”
The closing of the deal is subject to customary conditions such as approval by AVEO’s shareholders and regulatory approvals.
