Korean drug gets U.S. nod

The U.S. Food and Drug Administration approved a new drug developed by LG Life Sciences Co. for treating pneumonia and chronic bronchitis, the biotechnology company announced yesterday. The drug, called Factive, became the first domestically developed medicine approved by the U.S. drug agency. LG Life Sciences acquired approval for the drug in New Zealand in 2001 and in Korea last year. The company forecast about 80 billion won ($64 million) in annual royalties and sales of raw materials in overseas markets. The company expects to generate about 20 billion won in sales in the domestic market within 4 years. “We expect additional approvals in North America, Europe and Africa before the end of this year,” said Yang Heung-joon, president of the company. Just nine countries other than the United States have developed new medicines that have been approved by the U.S. Food and Drug Administration. Based on quinolones, antimicrobial agents effective in the treatment of certain communally acquired infections, Factive produces the same effects as antibiotics widely prescribed in the United States and other countries for pneumonia and bronchitis. But the drug, the company said, requires about a third as many doses and reduces the rate of recurrence of the illnesses. Antibiotics, particularly penicillin, have been widely used for respiratory diseases, which have contributed to the appearances of many bacteria that are resistant to such treatments. LG Life Sciences licensed the North American and European rights to Factive to U.S.-based Genesoft Pharmaceuticals Inc. last year for $40.5 million, including a $5 million downpayment and a $5 million upon approval of the drug by the U.S. drug authority. LG started to develop Factive in 1991. After joint clinical tests with Glaxosmithkline, the company attempted to obtain approval for the drug in the United States in 1999, but was rejected. Including Glaxosmithkline’s investment, LG Life Science, has spent a total of 300 billion won on the project. Glaxosmithkline withdrew from the project in April last year, and lost its rights to royalties earned from licensing of the drug, LG Life Sciences said. Industry observers said they expect the approval of the drug to contribute to stimulating the local pharmaceutical industry by spurring research and development efforts and open the possibility that multinational pharmaceutical firms will recognize the potential of local medicine developers and seek to form partnerships with local companies. But they also advised domestic pharmaceutical firms to make changes in their approaches to the business. Critics said the business model for most domestic pharmaceutical firms has been to concentrate on making copies of medicines developed by companies in other countries rather than developing original drugs. by Shim Jae-woo