Yuhan Corp. and Green Cross Corp., South Korea’s top two pharmaceutical companies by sales, have joined hands to develop treatments for rare diseases, a new area both companies are hoping to groom as a new growth engine.

The two drug makers announced Tuesday that they signed a memorandum of understanding to jointly develop drugs for rare diseases. They will first develop an oral medication for Gaucher’s disease, a genetic disorder that is caused by a deficiency of the lysosomal enzyme and leads to a build-up of lipids in many organs. There are about 70 patients with the disease in Korea and 6,500 in the world.

The two companies agreed to collaborate only in searching for candidate materials to non-clinical stages, but will discuss whether to broaden the scope for cooperation beyond those stages later.

They decided to join forces not just for the greater good to help patients with rare diseases but also to secure future growth engines. Pharmaceutical companies usually have little interest in developing drugs for rare diseases because there are a very small number of patients, but they can be a good source of profits as the treatments typically carry a hefty price tag and firms can receive subsidies from the government.

“The partnership would not only help the pharmaceutical industry take a step forward in drug development, but also serve a great cause to make the world healthier,” an official from Yuhan said.

Shares of Yuhan closed Tuesday down 5.97 percent at 212,500 won and those of Green Cross slipped 6.53 percent to 207,500 won.

By Kim Hye-soon and Choi Mira

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