CEO Park reiterates Dong-A ST's shift from 'chemical to bio' in 2024, confident in the company's ability to establish a unique position in the global bio market. The centralized R&D Strategy Room is expected to play a crucial role in advancing this goal, focusing on building competitiveness in both initial stages and activities like licensing out.

Q1: Can you share with us the key initiatives and activities you have undertaken over the past two years?

"Over the past two years, I've taken on several key initiatives. Firstly, I restructured our research organization, establishing the R&D Strategy Room to align planning and researchers. Recognizing the importance of intermediary research for acquiring proven new drug substances beyond early stages, I proactively prepared for this trend.

A major focus was on anticancer drugs, given the intense competition in this field. To address the need for safety and efficacy validation, I created an intermediary research organization. Understanding the early-stage significance of licensing in and out, I explored building a scalable platform, mirroring successful approaches of global pharmaceutical companies, to strategically shape our R&D system.

Furthermore, I conducted research at the Songdo Campus and STGen Bio for CMC in the bio-related field. The Yongin Campus specializes in traditional synthetic drug development, while Songdo concentrates on bio CMC. Internationally, we cautiously salvaged drugs in Phase 2 or 3 development, resulting in a collaboration with SK Biopharm. Despite setbacks in licensing out our two anticancer drugs and Alzheimer's treatment (DA-7503), we anticipate increased visibility next year."

Q2: Please elaborate on the R&D Strategy Office. How do you assess goal achievement?

"The organization, divided into research, operations, and budgeting, aims to manage budgets effectively with ideas from business planning. The Research and Development (R&D) Strategy Office, comprising around 40 members, plays a pivotal role, especially in operational staffing. Collaborating with the Planning Director and the Head of Research, we implement planning-stage ideas into business activities while overseeing budget management. This year, strategic expansion includes recruiting doctoral-level talents, particularly in fields like oncology.

Our focus remains on consistently addressing aging-related diseases, including oncology, degenerative conditions, and inflammatory diseases. Like last year, we'll continue addressing aging-related diseases. Looking ahead, areas like Alzheimer's, cancer, and neurological disorders are under consideration.

In terms of goals, substantial outcomes are expected this year. Acknowledging our limited capital compared to the global market, the acquisition of Abtis positions Antibody-Drug Conjugates (ADC) at the core of our research. Our R&D direction is clear and focused."

Q3: Does acquiring Abtis, a leading ADC platform company, reflect the Strategy Office's influence?

"It has been immensely helpful. Discussions covered research structure to marketing, enabling comprehensive deliberations. The acquisition of Abtis strategically elevates our ADC capabilities, aligning with our perspectives. Looking ahead, while gene therapy seems fitting for the future considering Dong-A ST and STGen Bio foundations, utilizing ADC remains a possibility."

Q4: Let's discuss Stelera's biosimilars and current biotechnology trends. What direction is the industry heading, and what strengths can Dong-A ST leverage?

“Biosimilars will keep evolving. After Stelera's biosimilar release later this year, we must quickly develop something new. Conventional monoclonal antibody drugs face tough competition. We see potential in antibody-drug conjugates (ADCs). For example, STGen Bio, with a 2000-liter production facility, could efficiently supply pharmaceuticals globally, reducing overall patient volume. We aim to excel in ADC production, handling all aspects except connecting the antibody and toxin.”

Q5: If we are steering towards biotechnology, shouldn't we also consider expanding production facilities?

“We're considering expanding the Songdo factory based on Stelera’s biosimilar sales revenue. Leveraging Songdo Research Institute's CMC capabilities, we plan to turn STGen Bio into a CDMO structure. We envision constructing a facility behind the research institute, using the large vacant area for gene therapy production and connecting antibodies and toxins. With recent Abtis acquisition, the project is set to begin earnestly around year-end.”

Q6: Could companies like Samsung Biologics, Celltrion, and Lotte Biologics consider engaging in the same business as Dong-A ST?

“In a scenario with large biotech companies, claiming Dong-A does what they cannot doesn't make sense. However, we're actively seeking opportunities within this context. Discussions focus on leveraging existing facilities. Through future partnerships, we aim to thoroughly discuss specific drug distribution across different countries."

In the antibody field, third-generation linker technology has emerged. Without pioneering innovation yet, constructing similarly large-scale facilities as others in Songdo is impractical. Nevertheless, we plan to address internal challenges gradually, advancing through clinical stages to identify demand.”

Q7: Let's briefly discuss the pipeline. There seems to be a slight delay in the recent application for the phase 1 clinical trial in the United States for the obesity treatment drug DA-1726. What could be the strategies to overcome this delay and adapt to the market trends?

"Not everything can be disclosed pre-clinical trials. However, among GLP-1 receptor agonists, our mechanism is unique. The action ratio is crucial, and while the commonly used 1:1 ratio is effective, concerns like gastrointestinal issues complicate oral medication development. DA-1726 is anticipated to have a 3:1 action ratio, reducing side effects, muscle loss, and minimizing rebound effects."

Q8: Let’s discuss the human aspect rather than infrastructure. What are the team members’ thoughts on transitioning to bio-research?

“The average age of STGen Bio employees, among the three Dong-A ST affiliated companies, is around 31. I sense passion among my colleagues. Lately, we've explored collaborations with ST Pharma. As we delve into businesses like oligonucleotides, questions arise about why we aren't venturing into the mRNA business. We're contemplating potential synergies and possibilities in working on such initiatives. To change the mindset at Dong-A ST, we plan to invite experts, conduct seminars, and lectures to facilitate learning and enable our team to venture into new territories. Our focus is on cultivating new researchers in the small molecule pharmaceuticals field. While small molecule drug development endures, the direction is shifting towards bio. Actively working to attract high-caliber researchers, including those with doctoral qualifications, is crucial for our endeavors.”

Q9: How do you plan to strategically leverage NeuroBo in the future?

"Expectations are high. We plan to collaborate with NeuroBo in the future to shape Dong-A ST's business. NeuroBo's survival depends on the success of DA-1726 (the previously mentioned GLP-1 class therapy) and the non-alcoholic steatohepatitis (NASH) treatment DA-1241. After the clinical processes of these compounds, we need to present a vision. While Dong-A ST allocates 16-17% of its revenue to research expenses, the amount may be lower than some other pharmaceutical companies, but the proportion is higher. We have been exploring various ventures at events like the JP Morgan conference. If NeuroBo's project succeeds, we plan to establish a new role in Boston.

Secondly, in a slightly different dimension, we need to contemplate whether licensing out after Phase 1 and 2 trials in South Korea is what we desire. To become a global healthcare company, partnerships with entities like Boehringer Ingelheim and Yuhan Pharmaceuticals are crucial. We aim to establish such relationships for NeuroBo."

Q10: In the case of MASH, many drugs on the market have not achieved success. How does Dong-A ST compare in this regard?

“In the case of MASH, currently available drugs can address symptoms in stages 1 to 3, but none can prevent progression to advanced stages. DA-1241 operates on a different mechanism. Without guaranteeing coverage up to a specific stage, we are considering the direction of gene therapy to address this challenge.”

Q11: Could you share your plans for licensing in/out this year? Also, could you provide insights into the internal pipeline that Dong-A is currently focusing on?

“For licensing in, we plan to acquire early-stage assets, possibly through acquiring the entire substance or licensing arrangements. Licensing out focuses on minimizing, with high expectations for the Phase 1 anticancer agent, DA-4505, and the Phase 1 cognitive enhancer, DA-7503. Research related to inflammatory diseases aims for at least minimal licensing, our primary goal for the year. Although DA-7503 has promising data, with no clinical data yet, it seems promising if safety is not a major concern (from an efficacy standpoint).

Inflammatory diseases, whether neurogenic or gastrointestinal, present distinct challenges. Despite this, substances targeting inflammasomes are still in early stages for many companies. Considering this, we believe it's crucial to move swiftly, especially in the first-in-class category."

Q12: You mentioned collaboration with major pharmaceutical companies in last year's interview. Indeed, collaborations with SK Biopharmaceuticals and HK inno.N have been established. Are there any additional plans for collaboration this year?

"As we pursue organic growth through mergers, acquisitions, and research, collaborations will persist this year. Through these partnerships, we aim to enhance capabilities and propel South Korean pharmaceutical companies toward global prominence. Currently, we are in discussions with 2 to 3 potential collaborators, recognized names in the industry. Engaging in licensing activities is crucial for Dong-A ST, at least by its centennial anniversary in 2032, to meet obligations and ensure organic growth."