[비즈한국] HLB has faced its third setback in its pursuit of U.S. Food and Drug Administration (FDA) approval for a new drug. The "Rivoceranib-Camrelizumab combination therapy," currently being developed as a first-line treatment for liver cancer, failed to clear the hurdle after receiving a Complete Response Letter (CRL) from the FDA. The market is deeply concerned that this latest setback may negatively impact investment sentiment not only for the HLB Group but for the entire domestic pharmaceutical and biotech sector.
Quality Control Issues at Partner Hengrui Medicine are the Cause
HLB announced in a public disclosure that it had received a CRL regarding the FDA review of its Rivoceranib-Camrelizumab combination therapy. This marks the third time, following similar outcomes in May 2024 and March 2025.
While the previous first and second CRLs were hindered by CMC (Chemistry, Manufacturing, and Controls) risks related to Hengrui Medicine’s Camrelizumab, this time, no defects were found in the production process of either Rivoceranib or Camrelizumab itself.
HLB explained that the cause of this CRL was that the Active Pharmaceutical Ingredient (API) production facility for other generic drugs currently sold by Hengrui Medicine in the U.S. was flagged during a routine FDA cGMP (Current Good Manufacturing Practice) inspection, resulting in a "Form 483" (Notice of Inspectional Observations). According to HLB, the FDA conducted surprise inspections of Hengrui Medicine’s drug substance (DS) facility on April 15 and its finished drug product (DP) facility on the 3rd of this month, neither of which were Pre-Approval Inspections (PAI) for the new drug application of the Rivoceranib-Camrelizumab combination therapy.
The issue stems from the fact that the API for Rivoceranib is scheduled to be produced at these facilities. The FDA held back approval by citing quality control issues at the factory level, stating, "Approval for Rivoceranib cannot be granted until compliance with the facility's overall cGMP standards is verified." In other words, it is a "butterfly effect" caused by poor quality control of other drugs sharing the same factory, rather than a problem with Rivoceranib and Camrelizumab themselves.
However, the industry is concerned about the fact that HLB is effectively unable to exercise any control over its partner, Hengrui Medicine. Hengrui Medicine had been responding to the DS inspection since April and, despite receiving the DP inspection notice on July 3, withheld this information until it was belatedly notified to Elevar, HLB’s U.S. subsidiary, only on the 5th.
Reportedly, Hengrui Medicine excused itself by saying, "Because Rivoceranib is not yet a commercialized product, it was not the subject of the inspection, so we did not share the related details." This means that despite failing to obtain FDA approval three times, the situation was not properly communicated. HLB stated that it has officially requested the specific details of the FDA’s Form 483, which is at the heart of the current approval delay, from Hengrui Medicine and is awaiting a response.
Jung Yoon-taek, CEO of the PharmTech Research Institute, pointed out, "The fact that communication between partners was not smooth, despite the issue being related to a direct production facility, clearly shows the absence of structural control. It serves as a major lesson that there are clear limitations when managing joint development or collaborative relationships, as opposed to a single enterprise."
‘Samsung Bio Legend’ Kim Tae-han’s Confident Promises Rendered Embarrassing After 3 Months
As the situation unfolds this way, the position of Kim Tae-han, Chairman of the Bio Division of HLB Group, has become awkward. Chairman Kim, who built a flawless quality system as the inaugural CEO of Samsung Biologics, joined the HLB Group earlier this year amid expectations that he would be the "relief pitcher" to resolve HLB’s quality risks.
Chairman Kim had expressed confidence in the FDA approval of the Rivoceranib-Camrelizumab combination at the HLB Group’s integrated shareholder meeting held in April. At the time, he stated, "Since joining the HLB Group, I have reviewed all materials exchanged with the FDA over the past 2–3 months, as well as data from Elevar and Hengrui Medicine," adding, "Together with experts from Elevar, I personally visited Hengrui Medicine in China to inspect every corner of the production plant and share know-how on responding to the FDA." He further reassured shareholders by saying, "This situation is a common case, and I viewed the CRL review received by Hengrui Medicine as being on the borderline between approval and supplementation."
However, with the third attempt at FDA approval hitting a wall, those confident remarks have been rendered meaningless in just three months. While it is true that the cause was a cGMP issue related to an entirely different drug that HLB was unaware of, the result is that even a global quality expert showed clear limitations in controlling the independent and unexpected risks of an overseas partner.
Could This Spread to a Crisis of Confidence in K-Bio?
The setback of a leading bio stock, which ranks among the top of the KOSDAQ market capitalization, is casting a dark shadow over the entire market's asset value and credibility. Including HLB, which hit the lower limit as soon as the market opened, the stock prices of HLB Group affiliates fell by more than 17%.
Lee Seung-kyu, Vice Chairman of the Korea Biotechnology Industry Organization, also stated, "It is unreasonable to view this incident as a defect in the Rivoceranib compound itself or a problem with its fundamentals," but added, "However, there is concern that the market might misunderstand this and that it could spread to a crisis of confidence or a contraction of investor sentiment for the bio sector and the KOSDAQ market as a whole." He further diagnosed, "It serves as a painful lesson on how thoroughly domestic pharmaceutical and biotech companies must incorporate CMC risks and information-sharing systems at the commercialization stage into their contract terms when developing new drugs through overseas partnerships."
Although HLB has been tripped up by quality risks, its value as a new drug and the expansion of its follow-up pipelines are still considered solid. Vice Chairman Lee noted, "This incident should be approached as an area related to manufacturing, such as CMC from a Chinese partner," and added, "Since HLB has been transparent about the situation and disclosed response measures without hiding anything when accidents occurred, it is worth calmly listening to the strategies HLB will present in the future."
HLB is also awaiting the FDA’s approval decision for its second-line cholangiocarcinoma treatment, 'Lirafugratinib,' this coming September. At the 2026 ASCO GI (American Society of Clinical Oncology Gastrointestinal Cancers Symposium) held in January, it drew industry attention by releasing Phase 2 clinical data with an Objective Response Rate (ORR) of 46.5% and a Disease Control Rate (DCR) of 96.5%. It was also designated as a Breakthrough Therapy (BTD) by the FDA in 2023. In addition, through its major affiliate HLB Life Science, it is conducting clinical trials for additional indications for Rivoceranib (such as adenoid cystic carcinoma), and HLB Therapeutics is focusing on accelerating the development of its neurotrophic keratitis treatment pipeline, striving to diversify its portfolio of follow-up anticancer drugs and new drug candidates.