Mid-sized pharmaceutical firms Handok Inc. and Bukwang Pharmaceutical Co. have made a series of successful investment in biotech venture companies as part of open innovation. They have secured their future growth engines by investing in biotech venture companies at home and abroad which are developing orphan drugs.
Genexine Inc., a subsidiary of Handok, announced on June 19 that it will merge with Toolgen Inc. and will change its name to ToolGenexine Inc. Genexine is a biotech venture company specializing in orphan drug development. It has developed new drug candidate materials related to idiopathic Lymphocyte syndrome and short-bowel syndrome and have them designated as orphan drugs by the U.S. Food and Drug Administration. Handok injected a total of 33 billion won (US$28.56 million) in 2012 to become the largest shareholder of Genexine and currently owns 3,781,017 shares, or 16.7 percent, of the company. Genexine specializes in the treatment of immunological disorders, while Toolgen has gene editing technology. The merger of the two companies gave Handok a subsidiary with 2 trillion won (US$1.73 billion) in market cap. Handok is now jointly developing “HL2356,” a treatment for growth hormone deficiency, with Genexine.
Handok has also invested in other biotech companies. It invested 4 billion won (US$3.46 million) to acquire a 2.7 percent stake in SCM Lifescience Co. on June 5, securing an exclusive right for joint development and domestic commercialization of “stem cell therapy for severe atopic dermatitis.” In January, Handok and Genexine jointly invested US$25 million (28.73 billion won) to buy a 54 percent stake in U.S.-based Rezolute Inc., which specializes in metabolic rare diseases, becoming the largest shareholder. In March, it spent US$5 million (5.75 billion won) on acquiring a 10 percent stake in U.S.-based bio venture firm TRIGR Therapeutics Inc. An official from Handok said, “We believe that it is more effective to invest in biotech venture companies and carry out joint research with them rather than conducting our own research and development. We will continue to push forward open innovation in the future.”
In addition, Bukwang Pharmaceutical is aggressively developing new drugs through global open innovation. The company is jointly developing “JM-010,” a treatment for Parkinson disease related dyskinesia, with Contera PharmaApS, a Denmark biotech venture acquired in 2014. Bukwang Pharmaceutical sold off about one million shares of Anterogen Co. from August last year to this year and gained a total of 77.40 billion won (US$67.28 million) of investment profits. The return was as much as 36 times larger than its investment. Bukwang Pharmaceutical currently holds 600,000 shares, or 7.11 percent stake, of Anterogen. The company is also making an aggressive investment in domestic companies. It invested 2 billion won (US$1.74 million) in Seoul-based digital dentistry content O2O firm Medipartner Co. on May 29.