"Let's Create Treatments That Didn't Exist Before"…The Background Behind the Attention on Bio Companies' IPOs

Researchers at Novmeta Pharma, a company developing metabolic disease treatments, are conducting experiments in the laboratory.

[Asia Economy Reporter Choi Dae-yeol] The market capitalization of Seegene, a molecular diagnostics company that has been supplying diagnostic kits since the early days of the novel coronavirus infection (COVID-19) crisis, was outside the top 30 among KOSDAQ-listed companies until early this year. Since then, as the domestic and international COVID-19 outbreaks expanded, demand for diagnostic kits increased, and the company's stock price rose more than tenfold during this period. Since rising to second place in KOSDAQ market capitalization in July, it has maintained its position.

In mid-January, only three pharmaceutical and bio companies were among the top 10 in KOSDAQ market capitalization, but as of mid-September, that number has increased to six. In the KOSPI market, SK Biopharm recorded several upper price limits shortly after its listing, attracting strong investor interest. The pharmaceutical and bio sectors have historically been known for significant stock price volatility, but with increased interest in diseases and conditions due to COVID-19 and the recent massive inflow of funds into the stock market, attention toward bio ventures preparing for IPOs has also grown. Especially, major company listing schedules that had been postponed due to COVID-19 are expected to continue until next month, making careful selection more important.

Increased Interest in Pharmaceutical and Bio Companies Due to COVID-19
IPO Postponed in the First Half, Recently Resuming One After Another

According to industry sources on the 20th, Novumetapharma, developing new drugs for metabolic diseases, is targeting mid-next month for its KOSDAQ listing schedule. The expected public offering price is 32,500 to 36,000 KRW, with a total expected offering amount of 23.6 to 26.2 billion KRW. Established in 2010, this company is developing new drugs related to metabolic diseases based on high-functionality substances and holds the peptide complex new drug CZ (Cyclogy), based on the endogenous peptide substance 'C01', which is the core technology for therapeutics. Based on this, it is developing various therapeutics by improving insulin resistance, a key cause of major metabolic diseases such as type 2 diabetes and obesity, and through cell protection functions.

The company's CZ has undergone multiple clinical trials in the United States, proving its safety, and has filed or registered patents in the U.S. and major countries for treatments of diabetes, obesity, kidney diseases, and fibrosis. Based on this, it is considered a core candidate close to commercialization for type 2 diabetes treatments, obesity treatments, and chronic and acute kidney disease treatments. The chronic and acute kidney disease treatments are currently in the preclinical stage and, unlike other candidates, have multiple mechanisms effective in antioxidant, anti-inflammatory, and anti-fibrotic effects.

MiCo BioMed, an in vitro diagnostic company, focuses on molecular diagnostics, immunodiagnostics, and biochemical diagnostics based on its core technology called 'Lab-on-a-Chip.' Lab-on-a-Chip uses a small plastic chip to streamline the gene detection process. The company plans to conduct subscription this month and proceed with its KOSDAQ listing either at the end of this month or next month. Quantamatrix, a microbial diagnostic technology developer, is preparing for a technology-special listing next month. The company has developed the antimicrobial susceptibility testing product 'Dirast' and supplies it to Europe.

Additionally, Baxel Bio, a developer of anticancer immunotherapies, is scheduled to list on the 22nd. Founded in 2010 at the Clinical Vaccine Research and Development Project Group of Chonnam National University Medical School, the company researches anticancer immunotherapies based on immune cells and is pursuing a technology-special listing. Prior to this, insulin patch developer Eoflow and human application test specialist P&K Skin Clinical Research Center have recently been listed.

At the SK Biopharm KOSPI listing ceremony held last July at the Korea Exchange in Yeouido, Seoul, attendees including Cho Jung-woo, CEO of SK Biopharm (center), are taking a commemorative photo. Photo by Moon Ho-nam munonam@

"Let's Create Treatments That Don't Exist" Focused R&D
Novumetapharma Developing Metabolic Disease Treatments Targeting Diabetes and Obesity

Pharmaceutical and bio companies have only recently attracted attention in the domestic stock market over the past few years. Although the pharmaceutical industry itself is older than many fields, the history of new drug development is relatively short. Developing treatments that did not previously exist can generate enormous added value, but due to the extremely low success rate, it has been considered a difficult field to approach. While basic research capabilities have improved, the reality remains challenging when considering development capabilities to create actual products and sales after commercialization.

Nevertheless, since even finding clues to cure diseases and conditions that have not yet been conquered can be recognized as valuable technology, small research-focused companies as well as large corporations continue to emerge steadily. Gilead Sciences in the U.S., although relatively young, has focused its research and development capabilities in specific fields and developed treatments that did not previously exist, rising to become a global pharmaceutical company?a case closely watched in the bio industry. As shown by large domestic pharmaceutical companies such as Hanmi Pharm and Yuhan Corporation, it is possible to generate huge profits by exporting research-stage technologies.

Moreover, new drugs, once their efficacy and safety are proven, have the potential to expand markets beyond borders, distinguishing them from other industries. The treatments Novumetapharma is developing target chronic diseases such as diabetes and obesity, which have many patients worldwide and thus high demand for treatments. It is estimated that over 600 million people worldwide suffer from diabetes, and the treatment market size is expected to reach 70 trillion KRW by 2022. The obesity treatment market is projected to grow at an average annual rate of over 30% until 2027. There are also diseases like chronic kidney disease for which effective treatments have not yet been developed.