In a series exploring trends across the APAC region, Norstella’s subject matter experts from key biopharma hubs delve into this year’s standout developments and share their outlook for 2025.
South Korea has firmly established itself as a global biopharma innovation hub, ranking third worldwide in new drug discoveries. According to Citeline’s Pharmaprojects database, South Korean companies have discovered more than 1,300 new drug candidates in the past three years, accounting for 10% of the global total. This puts South Korea ahead of well-established R&D hubs like the UK, Switzerland, and Japan, with innovation spread across 321 pharmaceutical and biotech firms.
Source: Citeline, Pharmaprojects
Jung-Won Shin:
In 2023, South Korea ranked fourth globally for clinical trial hubs, with Seoul keeping its position as the world’s top clinical trial city. Despite a 5.5% fall in global clinical trials in 2023, South Korea saw an impressive 9% increase in the same year, according to Korean National Enterprise for Clinical Trials (KoNECT).
This growth reflects South Korea’s determination to continuously enhance its adaptability and innovation in clinical research.
For instance, the country’s AI-driven drug development sector has been expanding rapidly, with an average annual growth rate of 28% since 2016. To further support these initiatives, South Korea’s health ministry announced new measures to enhance development efforts. Currently, local firms are advancing nine AI-powered drug pipelines targeting various diseases, including cancer, dementia, and strokes, with projects spanning both domestic and international scales.
Digital therapeutics represents another area of advancement, with several pivotal clinical trials ongoing and four products already approved. However, the adoption of decentralized clinical trials (DCT) remains limited.
While DCTs have gained global attention since the COVID-19 pandemic, regulatory challenges have slowed their implementation for medicine development in South Korea, restricting progress to areas like digital therapeutics.
Oncology continues to dominate the region’s clinical trials, bolstered by a rise in innovative modalities such as antibody-drug conjugates (ADCs), positioning South Korea as a leader in driving forward advancements in both traditional and emerging areas of development.
Jung-Won Shin:
One of the most notable milestones for South Korea’s pharmaceutical industry was the FDA approval of Yuhan’s novel lung cancer drug, lazertinib, which had been out licensed to Johnson & Johnson. In August, the FDA approved Lazcluze (lazertinib) for use in combination with J&J’s Rybrevant (amivantamab) as a first-line treatment for non-small cell lung cancer with EGFR mutations. This marked the first-ever FDA approval of a Korea-originated oncology drug, setting a precedent for future innovation in the country.
Additionally, GC Biopharma’s immunoglobulin product, Alyglo, received US FDA approval, was launched, and began distribution this year.
Domestically, Wegovy (obesity treatment) and Leqembi (Alzheimer’s drug) launched in Korea, though they have yet to be reimbursed. Meanwhile, several new digital therapeutics were approved, reflecting South Korea’s growing role in digital health innovation.
Jung-Won Shin:
South Korea has built a strong reputation for speed, efficiency, and regulatory support in clinical research, distinguishing it from other APAC regions. The country’s advanced healthcare infrastructure, strong government backing, and well-established research ecosystem enable it to attract a high volume of global clinical trials.
South Korea is a strong clinical trial hub, offering top-tier research institutes, experienced researchers, and high accessibility to key opinion leaders, enabling rapid trial initiation. A key advantage is the structure of university hospitals, where cancer centers are integrated rather than separated, allowing for seamless collaboration across various disease specialties. This setup enhances coordination and accelerates clinical research efforts, according to experts at recent conferences in Seoul.
However, they also emphasized the need for South Korea to improve flexibility in adopting innovative approaches and novel trial designs to stay competitive amid the rapidly evolving global clinical trial landscape.
Another advantage is its growing expertise in digital health and AI-driven drug development, supported by government initiatives and investment in cutting-edge R&D.
Jung-Won Shin:
One of the biggest challenges facing South Korea’s biopharma industry—particularly for small-scale bioventures—is the persistently weak funding environment. While venture capital investment in the biomedical sector increased by 14% in the first nine months of 2024 compared to the same period a year earlier, it remains nearly half the level seen at its peak a few years ago, according to the Korea Venture Capital Association.
Although IPOs have picked up in recent months, market sentiment remains cautious. Several bioventures have priced their IPO shares below the expected range, while others have postponed their listing plans to 2025 — partly due to emerging political uncertainties.
It is difficult to predict the impact of the ongoing political turmoil, as the Constitutional Court is set to decide on the impeachment of President Yoon Suk-Yeol in the coming months. However, given that the current administration has been actively promoting the biohealth industry, there are concerns that this momentum could slow down if political instability persists.
For many South Korean biopharma companies, the focus remains on expanding into global markets through partnerships with multinational pharma firms and out-licensing deals. However, larger-scale deals have primarily been concentrated in new modalities and drug delivery technologies, rather than traditional pharmaceuticals.
Jung-Won Shin:
Since 2020, there has been a rise in large-scale M&As, including outbound acquisitions where Korean companies acquire or invest in foreign firms.
Additionally, business diversification beyond traditional biopharma has gained momentum, with companies expanding into digital healthcare and even space-related industries. M&A activity has also extended beyond biopharma, with deals between biopharma and non-biopharma companies becoming more common. However, the majority of M&A transactions still take place between Korean firms.
Among the notable deals, in January 2024, food giant Orion acquired leading ADC developer LigaChem Biosciences (formerly LegoChem Biosciences) in a landmark domestic M&A deal valued at over $400 million. In June, SK Bioscience acquired a 60% stake in German CDMO IDT Biologika for approximately $244 million, marking a significant outbound expansion in the biomanufacturing sector.
Although no imminent M&A deals have been announced for 2025, major Korean companies are expected to continue pursuing strategic acquisitions for growth and diversification. SK Biopharmaceuticals and SK Bioscience, both part of the SK Group, are likely to explore further M&A opportunities. For instance, SK Biopharm has been expanding its focus into targeted protein degradation, radiopharmaceuticals, and cell and gene therapies—areas that could drive future acquisitions.
Meanwhile, Celltrion may resume its merger plans with affiliate Celltrion Pharm, pending shareholder approval. The company could also explore new acquisitions to strengthen its non-biosimilar portfolio, although its immediate focus appears to be on expanding its recently established CDMO subsidiary.
Jung-Won Shin:
South Korea is currently facing significant political uncertainty, with the Constitutional Court set to rule on the fate of President Yoon in the coming months. In the meantime, the government’s push to foster the biohealth industry could lose some momentum.
Amid this uncertainty, the biopharma sector’s top priority will be to sustain R&D progress and drive further growth despite the shifting political landscape. Companies will continue efforts to out-license new drug candidates and platform technologies, as well as forge global partnerships.
For firms that have successfully launched in-house developed drugs in the US and other major markets, the primary focus will be on expanding global sales and strengthening their market presence. Meanwhile, large Korean companies are expected to continue exploring new modalities and pursuing M&A opportunities for business diversification.
Pharmaceutical companies such as Hanmi and Dong-A will focus on advancing key pipelines, particularly in obesity treatments, while CDMO firms are likely to see continued strong demand, especially in light of the Biosecure Act and the increasing emphasis on global biomanufacturing capabilities.
Jung-Won Shin:
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