After two FDA rejections and mounting investor pressure, HLB is scrapping the corporate shell it once used to support its cancer ambitions.
In a sweeping all-stock deal announced late Tuesday, the Korean biotech will absorb its affiliate HLB Life Science—reclaiming full rights to VEGFR2 inhibitor rivoceranib, cutting overlapping assets, and streamlining its split oncology pipeline.
The move dissolves a dual-ownership structure that had divided rivoceranib’s rights and revenue streams between HLB and its affiliate.
HLB is merging with its Life Science affiliate to regain full control of its stalled cancer drug, rivoceranib, and streamline development ahead of a third FDA filing. (Credit: Getty Images)
The merger follows a second FDA rejection of rivoceranib, submitted in combination with PD-1 inhibitor camrelizumab, over manufacturing and sterilization issues tied to Chinese partner Jiangsu Hengrui.
HLB now plans to refile the NDA by May, aiming for a decision by July. At a shareholder meeting Monday, executives pointed to industry data showing 74 percent of drugs that receive a second CRL eventually win approval—typically within 100 to 224 days.
“If rivoceranib is approved in the U.S. this year,” said HLB Life Science CEO Nam Sang-woo in Tuesday’s release, “the impact on our corporate value could be significant.”
The deal gives HLB full control of HLB Life Science’s 14 percent stake in HLB Pharmaceutical, its R&D center in Dongtan, Gyeonggi Province, where teams are currently exploring rivoceranib-based combination therapies—and two unlisted affiliates: cell therapy arm HLB Cell and HLB Energy, which notably holds waste incineration assets. HLB Life Science also owns roughly 1.93 million shares of HLB itself.
The transaction values HLB Life Science shares at 6,812 won ($4.62), with shareholders receiving 0.1167458 HLB shares each. A vote is scheduled for June 12, with the deal expected to close Aug. 1. Life Science shareholders will have the right to demand a buyback between June 12 and July 2.
The shake-up comes as HLB tries to regain footing after a string of clinical and regulatory setbacks. The company dropped a proposed severance package for executives on Monday, citing poor shareholder returns, and is now positioning the merger as a pivot toward a “unified FDA engagement strategy.”
That approach will also apply to its follow-up candidate, lirafugratinib, with a U.S. phase 2/3 filing in bile duct cancer slated for December and a potential approval targeted for August 2026. Global partnership talks are already underway, according to the company.