[IPO Spotlight] Inventage Lab Faces Concern Over Low Major Shareholder Stake

Less than 20% Stake by Largest Shareholder After Listing
Obstacle Not Only to Management Stability but Also to Fundraising After Listing

[Asia Economy Reporter Park Hyungsoo] Inventizelab, a drug delivery technology platform developer, is embarking on the development of long-acting injectable drugs following its entry into the domestic stock market. The funds raised through its initial public offering (IPO) will be used for research and development expenses as well as for acquiring R&D equipment and facilities.

According to the Financial Supervisory Service's electronic disclosure system on the 21st, Inventizelab is offering 1.3 million new shares for its listing on the KOSDAQ market. The expected public offering price per share ranges from 19,000 to 26,000 KRW, with the total expected amount between 24.7 billion and 33.8 billion KRW. Institutional investors will participate in a demand forecast over two days from the 8th to the 9th of next month to finalize the offering price. The lead underwriter is Korea Investment & Securities.

Founded in 2015, Inventizelab has been continuously conducting research to develop long-acting injectable drugs and cell and gene therapy manufacturing platforms. Its strength lies in its drug delivery system (DDS) platform based on microfluidics. Microfluidic technology is a branch of fluid dynamics applied in precision process engineering and diagnostic devices. Inventizelab is the first in the world to apply this technology in pharmaceutics to achieve advanced release control and GMP manufacturing systems. The company has secured a micro-particle-based long-acting injectable drug platform (IVL-DrugFluidic®) and a manufacturing platform technology for next-generation gene therapies and vaccines (IVL-GeneFluidic®).

Inventizelab is developing various new drugs including treatments for male pattern baldness, dementia, drug addiction, benign prostatic hyperplasia, and prostate cancer. The male pattern baldness treatments, ‘IVL3001 (1-month duration)’ and ‘IVL3002 (3-month duration),’ are being developed as long-acting injectables, unlike existing oral treatments that require daily dosing. In 2020, the company signed a joint development and commercialization agreement for the baldness treatment with Daewoong Pharmaceutical. Last year, it entered into a technology transfer agreement with Withus Pharmaceutical for clinical sample and commercial product manufacturing. Phase 1 clinical trials for 'IVL3001' have been completed in Australia. Next year, Withus Pharmaceutical will establish a GMP manufacturing facility and proceed to Phase 3 clinical trials in Korea.

For dementia treatment, Inventizelab is developing a 1-month long-acting injectable (IVL3003) based on donepezil, the most commonly used drug ingredient. IVL3003 received approval for its Phase 1 and 2 clinical trial application (IND) from the Australian Therapeutic Goods Administration (TGA) in June. The company aims to enter clinical trials in the first half of next year.

By combining Inventizelab’s platform technology with already validated drug active ingredients, therapeutic effects can be enhanced. The development period for long-acting injectables is relatively shorter compared to innovative new drugs that require discovery and validation of new candidate substances.

Kim Juhee, CEO of Inventizelab, stated, "Our platform technology can actively expand the market through quantitative and qualitative expansion of drug delivery systems," adding, "We aim to achieve early commercialization of our existing pipeline through the KOSDAQ listing."

CEO Kim Juhee holds a Ph.D. in Biochemistry from Kyungpook National University and has over 20 years of experience working at various pharmaceutical companies including Kwangdong Pharmaceutical, Hanyang University Medical School’s Institute of Medical Science, Seegene, and BC World Pharmaceutical. While handling clinical and regulatory affairs for long-acting injectables at BC World Pharmaceutical, she developed an interest in the growth potential of drug delivery technology. She founded Inventizelab with the expectation that the drug delivery technology field would grow by developing new platforms using microfluidics engineering.

After listing, the shareholding ratio of CEO Kim Juhee and related parties will decrease to 19.44%. To secure stable management control post-listing, voting rights of seven executives will be delegated to Kim Juhee for three years from the listing date, and some voting rights of friendly shareholders will be delegated to her for two years from the listing date. Including shares under joint purpose holding agreements, the friendly shareholding ratio totals 22.14%.

Since its establishment, Inventizelab has issued 3,561,431 redeemable convertible preferred shares to raise funds. Between September and December 2020, all previously issued preferred shares were converted into common shares, which explains the relatively low shareholding ratio of the largest shareholder.

Due to the low shareholding ratio of the largest shareholder, additional fundraising after listing is expected to be challenging. Given the nature of new drug development, even if technology export contracts are signed, it takes time to receive milestone payments beyond upfront fees. Unexpected additional expenses may also arise during clinical trials. Inventizelab and its lead underwriter anticipate achieving profitability starting in 2025. Sales are projected to be 4 billion KRW this year, 7.3 billion KRW in 2023, 15.8 billion KRW in 2024, and 33.8 billion KRW in 2025. Of the expected 2025 sales, 27.3 billion KRW is anticipated from technology export contracts, which adds uncertainty compared to other manufacturing companies’ performance estimates.