[Special Stock] Dawonsys Highlights Subsidiary Developing 'Dream Cancer Treatment' Expected to Kill Cancer Cells with One-Time Therapy

Dawon Systems is showing strong performance. The news that cancer tissue was removed from a patient who received Korea's first carbon ion accelerator therapy appears to be influencing the stock price. Dawon Systems' subsidiary, Dawon Medax, is developing 'Boron Neutron Capture Therapy (BNCT),' known as the 'dream cancer treatment.'

As of 11:17 AM on the 21st, Dawon Systems is trading at 16,790 KRW, up 11.34% from the previous day.

According to Yonsei Cancer Hospital, a patient who received carbon ion therapy in April confirmed through a detailed examination three months later that the cancer tissue had disappeared. Carbon ion therapy is performed by accelerating carbon atoms close to the speed of light using a synchrotron accelerator, then precisely irradiating the energy beam only to the patient's cancer cells through a fixed or rotating treatment device. It is known to have 2 to 3 times better biological effects than conventional radiation therapy.

Earlier, in July, Dawon Medax received approval from the Ministry of Food and Drug Safety for a domestic clinical trial plan of BNCT for head and neck cancer. Head and neck cancer is a tumor occurring from above the clavicle to below the brain. Due to the anatomical characteristics of head and neck cancer, it includes the tongue and throat, which affects breathing, phonation, and swallowing, thereby lowering patients' quality of life. It is one of the tumors difficult to treat with existing methods. Dawon Medax started this as a Ministry of Trade, Industry and Energy policy project in 2016 and, after over seven years of research and development, developed an independent linear accelerator-based BNCT system.

BNCT is a treatment method that selectively destroys cancer cells by using boron drugs and medical accelerators to induce particle radiation energy from the nuclear reaction between boron and neutrons inside cancer cells. Because the treatment mechanism allows cell-level therapy, it minimizes damage to normal cells while achieving a high cancer cell destruction effect. It shows excellent therapeutic effects in brain tumors, head and neck cancer, and skin melanoma, which are difficult to treat with current medical technology. It is expected to improve patients' quality of life by providing high treatment effects with a single treatment session without surgery. It is also anticipated to be effective against resistant cancers that do not respond to drugs and requires fewer treatment sessions than other particle therapies.

The reason BNCT is gaining attention as a new cancer treatment is that, due to its treatment principle, it can treat down to the cellular level where boron drugs are absorbed. Compared to existing radiation and particle therapies that can only treat visible solid tumors, BNCT acts on individual cells, enabling treatment of infiltrative cancer, micro-cancer, dispersed cancer, and recurrent cancer. It is based on a single treatment session principle, which can enhance patients' quality of life. Japan completed efficacy verification by approving BNCT in March 2020. With Dawon Medax's clinical trial commencement, it is expected to enter a competitive stage with Japan in securing the BNCT market and technology.

Last month, Dawon Medax signed a memorandum of understanding (MOU) for mutual cooperation with KMD Bio to develop effective boron delivery agents for BNCT and to successfully commercialize them.

As the efficacy of carbon ion therapy is proven and related stocks surge, it is expected to have a positive impact on Dawon Medax's entry into the domestic stock market. Dawon Medax received an A grade from NICE D&B in a mock technical evaluation last year. It scored high in technology completeness, competitive advantage, and commercialization competitiveness. The BNCT device is a domestically developed technology based on a linear accelerator, replacing expensive large radiation medical devices that were entirely imported. It also received excellent evaluations for being designated as an innovative medical device by the Ministry of Food and Drug Safety.

Yu Mu-young, CEO of Dawon Medax, said in an interview with the media in April, "We plan to officially start the listing track by applying for a technical evaluation within this year," and "We are preparing to list in the first half of next year."

Na Seung-du, a researcher at SK Securities, said, "The possibility of the subsidiary Dawon Medax's listing is one of the expectations for Dawon Systems," and added, "There is a high possibility that Dawon Medax will knock on the door for an initial public offering (IPO) again in the second half of the year."