SK Biopharm reinvests Xcopri gains in new drugs

SK Biopharmaceuticals is channeling cash generated by its internally developed epilepsy drug Xcopri into new medicines, signing two neurology licensing deals with a combined potential value of more than $1.1 billion in just two months.

The company last month licensed opakalim, an epilepsy drug candidate, and Biohaven’s related Kv7 ion channel platform for up to $795 million. This month, it secured global rights to a Parkinson’s disease candidate from Korea’s 1ST Biotherapeutics in a deal worth up to 430.8 billion won ($318 million).

The rapid dealmaking signals that SK Biopharmaceuticals is establishing a cycle in which cash generated by Xcopri is reinvested in follow-on drugs that could become its next growth engines.

According to industry sources on Tuesday, SK Biopharmaceuticals has recently intensified efforts to acquire external drug candidates.

Its largest investment came through the opakalim agreement signed with Biohaven on Aug. 26. The deal includes $400 million in near-term cash consideration as part of total upfront and milestone payments of up to $795 million.

On Sept. 17, SK Biopharmaceuticals signed an exclusive global licensing agreement for 1ST-104, a Parkinson’s disease candidate developed by 1ST Biotherapeutics.

The licensing agreement is valued at up to 430.8 billion won. SK Biopharmaceuticals will pay 2.5 billion won upfront, with the remainder tied to development and commercialization milestones. It also agreed to make a separate equity investment of 3 billion won in 1ST Biotherapeutics.

The pace is unusual for the company, which previously completed major external investment deals at a rate of roughly one a year.

The expansion has been supported by growing sales of Xcopri in the United States. U.S. sales of the epilepsy treatment reached 422.1 billion won in the first half of this year.

SK Biopharmaceuticals posted consolidated first-half revenue of 475.3 billion won and operating profit of 186.8 billion won, both sharply higher than a year earlier. The company targets U.S. Xcopri sales of between $550 million and $580 million this year.

Net cash provided by operating activities nearly quadrupled to 96.1 billion won from 23.9 billion won a year earlier.

Cash and cash equivalents stood at about 380 billion won at the end of June, up more than 70 billion won from 307.8 billion won at the end of last year, showing that Xcopri’s sales growth is translating into stronger cash generation as well as higher earnings.