+ A

Upcoming IPOs offer hope for biopharm industry

SK Bio tops list of promising firms with plans to list this year
Oct 30,2019
Investors still have high hopes for the floundering local biopharmaceutical industry with some major initial public offerings (IPO) still being planned.

Investor sentiment has steadily fallen after a number of biopharmaceutical companies failed in conducting Phase 3 clinical trials for their candidate drugs, but some companies have made formidable achievements this year and have drawn interest from investors.

SK Biopharmaceuticals announced Sunday that it submitted an application to the Korea Exchange (KRX) for its planned IPO on the main bourse Kospi.

With the announcement, the biopharmaceutical affiliate of SK Group has officially started preparing to be listed, which is expected to happen within this year.

Investor expectations are high for SK Biopharmaceuticals’ IPO as the company is one of the few to have successfully completed Phase 3 clinical trials for their candidate drugs.

Just this year, SillaJen, Kolon Life Science and Helixmith have all struggled with Phase 3 Clinical trials in the United States, disappointing investors with the lack of results.

But the SK affiliate, which started developing drugs in 1993, successfully completed Phase 3 clinical trials for its anti-epileptic drug candidate Cenobamate in February and filed a new drug application to the U.S. Food and Drug Administration (FDA).

The U.S. drug authority is expected to rule on commercialization next month. SK Biopharmaceuticals also signed a deal worth up to $530 million in February to export technologies on Cenobamate to Switzerland-based Arvelle Therapeutics.

Following these successes, investors expect SK Biopharmaceuticals to be listed with more than 5 trillion won ($4.3 billion) in market capitalization.

The SK affiliate is not the only promising IPO candidate from the Korean biopharmaceutical industry this year.

Local biotech firm Bridge Biotherapeutics announced last week that it earned preliminary screening approval to be listed on the secondary Kosdaq.

The no-research-development-only firm, which has focused on testing and commercializing candidate drugs purchased from other companies, applied for approval last month and is aiming to be listed on the tech and bio-heavy bourse within this year.

Bridge Biotherapeutics previously drew interest from investors when it signed a deal worth up to 1.5 trillion won to license its drug candidate BBT-877 to Boehringer Ingelheim.

As the company only embarks on development projects with drugs it buys, Bridge Biotherapeutics is looking to acquire at least one new drug candidate every year after being listed on the Kosdaq.

Syntekabio is another biotech firm waiting to be listed on the secondary bourse, as it is waiting for the result of its preliminary screening application filed in August. The biopharmaceutical company specializes in developing drugs based on artificial intelligence and big data platforms.

But some analysts warn that such IPO moves are not something to be taken as a sign that the industry is completely back on the growth track.

“Investors have gotten serious in moving their funds,” said Ha Tae-gi, an analyst at Sangsangin Investment & Securities, in a report.

“Now, large-scale licensing agreements, trustworthy global clinical trial data and the development of promising drug candidates are necessary for a meaningful share price change.”

BY KO JUN-TAE [ko.juntae@joongang.co.kr]