[Bio Shaking the Market]⑥ Aprogen Pharm's Large-Scale Capital Increase for Biosimilar Production Investment

[Asia Economy Reporter Park Hyungsoo] Aprogen Pharmaceutics is raising funds again through a rights offering to shareholders just eight months after increasing capital for shareholders in August last year.

According to the Financial Supervisory Service on the 27th, Aprogen Pharmaceutics will issue 220 million new shares worth 308 billion KRW. The planned issue price per new share is 1,400 KRW, and the final price will be confirmed on June 24. Shareholders will be allocated 0.91 new shares for each existing share. The record date for allocation is June 2. Shareholders who receive new shares can participate in the priority subscription from June 29 to 30. If there are any unsubscribed shares after the shareholder subscription, a general subscription will be held for two days starting July 2 for general investors.

Aprogen Pharmaceutics plans to invest about 250 billion KRW of the raised funds to secure biosimilar production capacity. It is considering investing in the production facilities currently being expanded by its affiliate Aprogen Biologics in Osong, Chungbuk.

The company explained, "The reason for investing funds in the biosimilar production plant owned by Aprogen Biologics is that selecting a new site and constructing an entirely new factory building would likely incur unnecessary costs."

Aprogen Pharmaceutics plans to sign a contract to reasonably allocate profits generated from the production facilities of Aprogen Biologics, which will carry out biosimilar production operations.

In addition to covering the insufficient funds for the existing expansion facilities, 177.7 billion KRW will be invested in expanding new production facilities. From next year, approximately 130.7 billion KRW will be used over about two and a half years for production equipment used in culturing, purification, and finished product processes. Additionally, 25 billion KRW will be allocated for manufacturing support facilities such as water treatment devices, piping equipment, and power facilities for stable production, and 54 billion KRW will be needed for constructing a five-story building.

Aprogen Pharmaceutics is thus using about 50% of its current market capitalization of 340 billion KRW to secure biosimilar production capacity. Moreover, Aprogen Pharmaceutics also raised 85.7 billion KRW last August through a rights offering followed by a general subscription for unsubscribed shares. Of that, 55.4 billion KRW was allocated as a budget to secure biosimilar production capacity. The company is determined to secure investment from shareholders to produce biosimilars.

According to the technology transfer agreement signed with Aprogen, Aprogen Pharmaceutics has secured exclusive domestic sales rights for biosimilar products for five years upon receiving domestic product approval. Aprogen plans to obtain product approval from the Ministry of Food and Drug Safety by adding domestic data to the U.S. product approval data after obtaining biosimilar product approval in the United States.

The largest shareholder of Aprogen Pharmaceutics is Aprogen KIC, holding 45.94% (111,009,582 shares). The number of shares to be allocated in the capital increase is 101,062,727 shares, worth 141.5 billion KRW. Aprogen KIC announced plans to participate with at least 20 billion KRW based on the subscription amount. If it subscribes only 20 billion KRW of the allocated amount, its shareholding ratio could decrease to 27.14%.