LG Chem Expands Obesity Drug Licensing Deal with Rhythm Pharmaceuticals to $855 Million

LG Chem has significantly bolstered its commitment to Rhythm Pharmaceuticals' bivamelagon drug candidate, which aims to treat rare forms of obesity, elevating the total agreement value from $305 million to a staggering $855 million. This expansion highlights the increasing clinical progress and commercial potential of bivamelagon.

The revised agreement, worth approximately 1.15 trillion won, is more than double the original amount of around 400 billion won. The partnership initially began in January 2024 when LG Chem licensed the drug candidate to Rhythm Pharmaceuticals, which was in the early stages of Phase 1 clinical development.

Clinical trials have demonstrated promising results; bivamelagon, an oral melanocortin-4 receptor (MC4R) agonist, has shown a 9.3% reduction in body mass index (BMI) for patients who received 600 milligrams, compared to a 7.7% decrease with 400 milligrams. In contrast, the placebo group experienced a 2.2% increase in BMI during the 14-week Phase 2 trial. Rhythm Pharmaceuticals plans to advance bivamelagon into global Phase 3 trials this year.

Under the amended deal, Rhythm will contribute an additional $350 million in upfront payments to LG Chem between 2026 and 2029. These payments could potentially convert into royalties. The milestone payments have increased by $200 million, with less restrictive conditions for receiving them. The royalty structure has been revised, now assigning LG Chem a fixed 1% royalty on Rhythm's entire MC4R drug portfolio revenue, beginning in January 2029 or earlier if commercial sales occur sooner.

Rhythm's MC4R portfolio includes Imcivree (setmelanotide), bivamelagon, and RM-718, a candidate administered via a once-weekly injectable. The revised agreement reflects Rhythm's strategic efforts to expand its MC4R portfolio and provide more treatment options for patients with rare obesity disorders. Bivamelagon's oral formulation stands out from Imcivree, which requires daily injections and received FDA approval for acquired hypothalamic obesity in March 2026.

The success of global Phase 3 trials and commercialization will be crucial in determining the long-term value of this drug candidate.