Aug 30, 2024
by Suyeon Jang
Hello everyone,
This week, we take a closer look at Arbormed, an innovative biotech venture specializing in rare disease drug development and complex generic exports. We’ll explore the company’s achievements, its approach to drug development, and its technology transfer strategies.
Today’s Key Highlights
Arbormed’s Business Model: Rare disease drug development & complex generic exports.
FDA Approval Process & Advantages of the U.S. Market.
Arbormed: Leading Innovation in Rare Disease Drug Development & Complex Generic Exports
Hello everyone,
This week, we take a closer look at Arbormed, an innovative biotech venture specializing in rare disease drug development and complex generic exports. We’ll explore the company’s achievements, its approach to drug development, and its technology transfer strategies.
Arbormed: The Only Biotech in Korea with a Stable Revenue Model
Company Background
Arbormed was founded in 2017 by CEO Kyojin Park, an expert in pharmaceutical licensing and technology transfer. Leveraging his experience working with major pharmaceutical companies, Park established Arbormed as a cutting-edge biotech venture.
Before founding Arbormed, he ran MedCI, a consulting firm that specialized in licensing out new drugs to global pharmaceutical companies. One of his notable successes was facilitating LegoChem Biosciences’ technology transfer deal with Takeda Pharmaceuticals in Japan. Recognized for his expertise in the international biotech market, Park’s leadership has been a key driver of Arbormed’s rapid growth.
In 2022, Park returned to Korea to establish Arbormed, encouraged by Seokwon Yoon, CEO of Broadhill Ventures and a former biotech investment expert at SBI. With Park’s extensive global network, Arbormed launched its first major project—developing a treatment for Wilson’s disease.
Arbormed’s Business Model
Arbormed operates under two main business pillars:
Innovative Drug Development – Focusing on rare disease treatments.
Complex Generic Development & U.S. Market Entry – Targeting high-value generic drugs with technical barriers.
1. Rare Disease Drug Development
Arbormed focuses on developing innovative treatments for rare diseases, a niche market with high commercial potential due to limited competition. Despite the smaller patient population, successful rare disease treatments hold significant market value.
Rare disease drugs are classified as "orphan drugs" by the U.S. FDA, granting them several benefits, such as:
Faster regulatory approval processes.
Financial support for research and development.
Market exclusivity for a set period, reducing competition.
Arbormed’s Drug Pipeline: Wilson’s Disease Treatment
One of Arbormed’s key projects is a treatment for Wilson’s disease, a rare disorder caused by excessive copper accumulation in the body. Major pharmaceutical firms have been reluctant to invest in this field due to its niche market, but for biotech ventures like Arbormed, it presents a promising opportunity.
Currently, the treatment is in the preclinical stage, preparing for Phase 1 clinical trials.
Clinical Trial Stages:
Phase 1: Evaluates safety and basic pharmacokinetics in a small group of healthy individuals.
Phase 2: Tests efficacy and optimal dosage on a limited number of patients.
Phase 3: Conducted on a larger patient population to confirm treatment effects and long-term safety.
Arbormed aims to leverage the FDA’s fast-track approval process, maximizing early-stage licensing opportunities.
2. Complex Generic Development & U.S. Market Expansion
What Are Complex Generics?
Complex generics are generic versions of brand-name drugs with intricate formulations or delivery mechanisms. These drugs are technically challenging to develop, limiting competition and creating high-margin opportunities.
Arbormed’s Korea-based headquarters focuses on identifying strategic projects and planning market entry, while its U.S. subsidiary, Arbormed Pharma, oversees:
FDA approval processes.
Sales and distribution partnerships.
Supply chain and logistics management.
This dual-structure optimizes U.S. market penetration for high-value generics.
Arbormed’s Complex Generic Value Chain
Arbormed’s approach covers the entire lifecycle of complex generic drug development, from formulation to U.S. market entry:
Formulation Development – Transforming active pharmaceutical ingredients into patient-friendly forms (e.g., tablets, injections, patches).
Product Finalization – Ensuring safety, efficacy, and compliance with FDA regulations.
Manufacturing – Partnering with certified manufacturers while meeting cGMP (Current Good Manufacturing Practice) standards.
FDA Approval – Navigating ANDA (Abbreviated New Drug Application) processes for regulatory clearance.
Pricing & Market Access – Establishing distribution networks and securing reimbursement approvals.
Through this structured value chain, Arbormed helps Korean pharmaceutical firms successfully enter the U.S. complex generic market—a unique business model in Korea.
Arbormed’s U.S. Expansion Partners: Sales, Network, and Regulatory Support
Breaking It Down: FDA’s Generic Drug Approval Process
Before any new or generic drug enters the market, it must receive regulatory approval from agencies like the U.S. FDA or Korea’s MFDS (Ministry of Food and Drug Safety) to ensure quality, safety, and efficacy.
How Does the FDA Approve Generic Drugs?
The FDA conducts rigorous evaluations before allowing generic drugs to be sold. Unlike new drugs, generic drugs follow a simplified approval process called ANDA (Abbreviated New Drug Application), which requires proving that the generic version is just as effective as the original.
The approval process consists of two key steps:
Bioequivalence Testing – The generic drug must be absorbed into the bloodstream at the same rate and in the same amount as the original drug. This ensures identical therapeutic effects.
Manufacturing Standards Compliance – The drug must be produced under strict quality controls to maintain consistency. All facilities must comply with FDA’s cGMP (Current Good Manufacturing Practice) guidelines.
Complex Generics: A More Challenging Approval Path
Unlike traditional generics, Complex Generics require more rigorous evaluations, often including:
Additional clinical trials.
Stricter bioequivalence testing.
Enhanced scrutiny for specialized delivery systems (e.g., transdermal patches, inhalers).
Since these products are harder to replicate, fewer competitors exist, making complex generics a high-value market for companies like Arbormed.
Similarly, Korea’s MFDS follows a process similar to the FDA but with market-specific regulatory adaptations.
Complex Generics: A More Challenging Approval Path
Unlike traditional generics, Complex Generics require more rigorous evaluations, often including:
Additional clinical trials.
Stricter bioequivalence testing.
Enhanced scrutiny for specialized delivery systems (e.g., transdermal patches, inhalers).
Since these products are harder to replicate, fewer competitors exist, making complex generics a high-value market for companies like Arbormed.
Similarly, Korea’s MFDS follows a process similar to the FDA but with market-specific regulatory adaptations.
Why the U.S. Market?
1. The World’s Largest Pharmaceutical Market
The U.S. pharmaceutical industry is the largest in the world, offering immense revenue potential for both innovative drugs and complex generics. For biotech firms, U.S. market entry can unlock substantial economic opportunities.
2. FDA Approval: A Global Trust Signal
Successfully obtaining FDA approval significantly boosts credibility, making it easier to:
Expand into other global markets.
Attract strategic partnerships with international pharma companies.
3. Premium Pricing & Financial Incentives
The U.S. healthcare system allows for higher drug pricing, particularly for orphan drugs. Companies with FDA-designated orphan drugs receive:
Market exclusivity.
Government incentives.
Increased pricing power.
For Arbormed, this means higher revenue potential and stronger commercial success.
Laplace’s Investment Takeaways
What Sets Arbormed Apart?
Unlike traditional biotech ventures, Arbormed employs a dual strategy that balances early-stage revenue generation with long-term innovation.
Commercialization-Driven Approach
Capitalizing on rare disease drug development with early-stage out-licensing.
Generating stable revenue through complex generics while investing in high-value R&D.
Experienced Leadership & Strong Execution
CEO Kyojin Park: A biotech licensing expert with proven success in global technology transfers.
CTO Wonbin Im: Former head of new drug research at Dong-A Pharmaceutical, leading successful drug development projects.
With a team of seasoned industry professionals, Arbormed effectively navigates regulatory challenges and accelerates commercialization.
Arbormed’s Dual-Engine Strategy
Arbormed’s business strategy operates like two interlocking gears:
Gear 1: U.S. Market Expansion through Complex Generics – Overcoming regulatory hurdles to establish a foothold in a competitive market.
Gear 2: Rare Disease Drug Licensing – Creating high-value licensing opportunities in niche therapeutic areas.
Each gear is independently valuable, but together, they drive Arbormed’s long-term success. By synchronizing these strategies, Arbormed maximizes commercial potential and mitigates financial risk.
In our next deep dive, we’ll explore Ingenium, another Laplace investment with high-growth potential.
Wishing you all a great week ahead!
Best regards,
The Laplace Partners Team
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