Populous Korean Biotech

Biotech firms in Korea are second to none in the world in terms of technology but their values have been underestimated due to the small size of the domestic market.
Biotech firms in Korea are second to none in the world in terms of technology but their values have been underestimated due to the small size of the domestic market.

 

Domestic smaller biotech companies are drawing much interest by attracting huge investment from foreign investors.

South Korea biopharmaceutical manufacturer Hugel announced on April 17 that it held a board meeting on April 16 and resolved to issue convertible bonds and carry out capital increase through third-party allocation worth 454.7 billion won in total with respect to Bain Capital. The company added that it is looking to sell 100% of its shares owned by Dongyang HC to Bain Capital. Dongyang HC is currently the largest shareholder in Hugel.

The capital increase, convertible bond issuance and sale of the shares constitute a deal as big as 920 billion won. Once the processes are completed, Bain Capital becomes the largest shareholder in Hugel with a shareholding ratio of 45.32%. Hugel, a KOSDAQ-listed company established in 2001, is the sixth company in the world that succeeded in developing botulax on its own.

In August last year, Bain Capital formed a consortium with Goldman Sachs and acquired some shares from Carver Korea for approximately 430 billion won. Carver Korea is a medium-sized cosmetics manufacturer that has the cosmeceutical brand of A.H.C., which has become popular with its advertisement featuring actress Lee Bo-young. After the investment by the Bain Capital and Goldman Sachs consortium, Carver Korea recently signed a contract with Anne Hathaway for global ads.

In the meantime, Binex, a South Korean contract manufacturer supplying biopharmaceuticals, attracted an investment of 210 billion won in November last year from Tsinghua Tongfang Group, which is a state-run Chinese company. The two companies are planning to work with each other for biopharmaceutical development by joining an international R&D project to be launched by the South Korean and Chinese governments.

According to industry sources, this trend is a result of the appraisal of the technological strength and potential of South Korean biotech companies. “Biotech firms in South Korea are second to none in the world in terms of technology but their values have been underestimated due to the small size of the domestic market,” one of them explained, adding, “More and more global investors are focusing on these companies nowadays and it seems that some of them are doing so in order to better penetrate the huge Chinese market.”

 

 

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