Bio Stocks Rowing When the Tide Comes In, Continuous Fundraising

Peptron, ST Cube, Aptamer Science, DXVX, etc. Plan Capital Increase
Favorable Fundraising Environment Due to Improved Bio Investment Sentiment

Investor sentiment toward the bio sector is reviving in the domestic stock market. Alteogen has overtaken the secondary battery leader Ecopro BM to become the top company by market capitalization on the KOSDAQ market. Yuhan Corporation's stock price surged more than 40% following the U.S. Food and Drug Administration (FDA) approval news of the domestic lung cancer drug 'Reclaza' combination therapy. As 'buy' orders flood into the bio sector, bio companies are consecutively raising funds.

According to the Financial Supervisory Service's electronic disclosure system on the 29th, Peptron will raise 120 billion KRW by issuing 2.64 million new shares. The planned issue price is 45,450 KRW, and the final issue price will be confirmed on October 23. For every one existing share, 0.124 new shares will be allocated.

The raised funds will be used to establish a factory that meets current Good Manufacturing Practice (cGMP) standards and for research and development (R&D) and clinical trial expenses. Peptron is developing peptide new drugs and targeted anticancer antibody drugs. Its main pipelines include a long-acting diabetes and obesity treatment (PT403) and a prostate cancer treatment (PT105).

Developing long-acting drugs and peptide antibody new drugs incurs annual R&D expenses exceeding 10 billion KRW. As of the end of the first half of this year, the company’s debt stood at 16.6 billion KRW, with a debt ratio of 64.4%. It is expected that financial stability will improve through capital raising via a paid-in capital increase.

Peptron’s largest shareholder, CEO Choi Ho-il, holds an 8.37% stake. CEO Choi will subscribe to 50% of the 215,007 new shares allocated to him. Since the board resolved the paid-in capital increase on the 16th, the stock price has fallen more than 15%. The issue price may be lower than expected, potentially shrinking the scale of fund-raising.

ST Cube, a developer of immuno-oncology drugs, is pursuing a paid-in capital increase through a shareholder priority public offering worth approximately 75.7 billion KRW. It will issue 18.5 million new shares through the shareholder priority offering. Existing shareholders will be allocated 0.397 new shares per one existing share. The planned issue price is 4,090 KRW.

Separately from the public offering, ST Cube will issue new shares to ST Cube & Company. The issue price for this private placement is 4,690 KRW, more than 15% higher than the planned public offering price. It is expected that the participation of BioMedical Holdings, the largest shareholder of ST Cube, in the third-party allotment will increase the general public offering subscription rate. An ST Cube official explained, "Conducting the third-party allotment and shareholder priority public offering simultaneously is a way to increase the largest shareholder’s stake and protect shareholder value." They added, "Once the capital increase is completed, we expect to exit the management warning status, improve governance, and establish stable cash liquidity and an R&D structure."

Aptamer Science and DXN VX are also pursuing paid-in capital increases through shareholder allotment followed by a general public offering of unsubscribed shares. Aptamer Science plans to raise 24 billion KRW to fund research on solid tumor and hematologic cancer treatments. DXN VX intends to use most of the raised funds to repay debt.

An official from the financial investment industry said, "As the AI and semiconductor sectors, which led the market in the first half of this year, have slowed down, funds are flowing into the bio sector. We expect an increase in bio-listed companies seeking to raise funds for clinical expenses and debt repayment amid improved investor sentiment."