Two leading local pharmaceutical firms, LG Chem and SK Bioscience, have recently ended joint sales agreements with Daewoong Pharmaceutical, industry sources said.

According to the sources on Friday, LG Chem notified Daewoong in mid-August that it would nullify the deal for joint sales of anti-diabetic Zemiglo family drugs in the dipeptidyl peptidase-4 (DPP-4) inhibitor class.

Since the agreement for joint sales in 2016, Daewoong has been selling LG Chem’s Zemiglo (gemigliptin) series, including combo agent Zemimet for four years.

However, LG Chem recently claimed in the agreement termination notice that Daewoong has failed to implement two conditions required to maintain the contract.

According to LG Chem, Daewoong could not achieve 80 percent of the expected annual sales of Zemiglo-related drugs and “the minimum sales and administrative expenses,” initially agreed upon by the two firms, for two consecutive years since 2018.

“We have requested Daewoong to focus more on the promotion and sales of Zemiglo, but the company could not meet the conditions for the past two years,” an official at LG Chem said.

The official went on to say that although LG Chem in May delayed the contract termination and gave Daewoong three months to revise the deal. However, the two sides could not agree, and LG Chem notified the cancellation of the agreement recently, he said.

The official did not disclose the expected annual sales of Zemiglo drugs and the period of the contract.

An official at Daewoong admitted that LG Chem notified the intention to nullify the deal. However, the bilateral agreement was still valid, and the two sides were in negotiations.

Daewoong did not violate the agreement but merely had a different stance in interpreting the deal's conditions, the official said. Daewoong will continue discussing the issue with LG Chem, he added.

In June, the joint marketing and sales agreement between SK Bioscience and Daewoong for SK Bioscience’s Skyzoster came to an end. Skyzoster is a live vaccine that attenuated the varicella-zoster virus.

The ending of the deal came as the agreement, established in May 2018, expired. SK Bioscience and Daewoong agreed not to renew the contract.

Skyzoster is one of the two leaders in the local shingles vaccine market, along with MSD’s Zostavax.

SK Bioscience said marketing activities for Skyzoster will still be active because its sales partnership with JW Shinyak remained still valid.

SK Bioscience signed the joint marketing and sales deal with JW Shinyak in 2016.

JW Shinyak has been selling Skyzoster to clinics, while Daewoong has been focusing on sales at hospitals.

SK Bioscience did not look for a new partner to jointly sell the shingles vaccine, the official at the company said.

kch@docdocdoc.co.kr

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