[Funding] ZenenBio② Continues Investment to Establish Xenotransplantation Platform

[Asia Economy Reporter Hyungsoo Park] The artificial organ market, which ZenenBio is developing, is expected to grow to $30.9 billion (approximately 35 trillion KRW) by 2025. The domestic artificial organ market size grew at an average annual rate of 10.6%, from 365.3 billion KRW in 2015 to 493.6 billion KRW in 2018. It is expected to form a market of 815.2 billion KRW in 2023.

Artificial organs are devices that have the same functions as human organs and tissues to restore, regenerate, or replace human tissues and organs that have lost their functions. Artificial organs are broadly divided into xenogeneic organs, cell-based artificial organs, and electronic artificial organs. As diseases that cause organ function deterioration increase, the number of patients waiting for organ transplants is also rising.

According to the Korea Disease Control and Prevention Agency, the organ supply rate for transplant waitlists in Korea is only 11%. More than five people die daily while waiting. Since 2014, the number of patients waiting for organ transplants has steadily increased. As of 2019, the total number of organ transplant waitlist patients was 40,253, an 8.2% increase compared to the previous year.

ZenenBio is developing the ability to transplant animal tissues, cells, and organs into humans. They are developing genetically modified pigs, which serve as raw materials for xenogeneic organs, and producing them in sterile conditions. They extract tissues, cells, and organs to verify efficacy and safety. They are building a comprehensive 'xenotransplantation platform' that covers the entire process of xenotransplantation, including actual transplantation into humans.

In April of this year, ZenenBio was selected by the Ministry of Health and Welfare as the lead institution for the project "Verification of Clinical Applicability of Xenogeneic Organ Transplantation." They are conducting research on the development and verification of genetically modified pigs, sterile production facilities, and xenogeneic solid organs.

If successful in developing xenogeneic organs, it could generate enormous added value, but commercializing the products under development requires enormous costs and time. Entering clinical trials takes at least 8 to 9 years, with continuous costs incurred. Clinical trial results may show insufficient efficacy or fail safety evaluations.

ZenenBio has been steadily raising funds for research and development. Over the past three years, they have raised 18.976 billion KRW through four rounds of paid-in capital increases. They have also issued 17 stock-related bonds, raising 98.983 billion KRW.

From last year through the first half of this year, ZenenBio spent a total of 5.696 billion KRW, including 316 million KRW for material purchases, 3.228 billion KRW for labor costs, 1.914 billion KRW for ongoing research and development expenses, and 238 million KRW for other expenses.

As of the end of the first half, the consolidated debt ratio was 147.0%, and the dependence on borrowings was 42.2%. Net losses have been continuously recorded from 2017 through the first half of this year.