[Market Focus] Kipspharma Rises on Successful CB Issuance Ahead of Oral Obesity Drug Development

As of 9:56 a.m. on June 17, Kipspharma's share price on the KOSDAQ market was up 23.46% from the previous day's closing price, trading at 21,050 won. This appears to be due to news that the company has successfully issued a large-scale convertible bond (CB) ahead of the announcement of results from a non-clinical primate trial for an oral obesity treatment, which is being attempted for the first time in Korea.

The previous day, Kipspharma announced that it had decided to issue its 7th round of bearer, unsecured, private convertible bonds worth 23 billion won. Both the coupon rate and maturity interest rate are 0%, and the conversion price is 15,911 won. The participating institutions include Korea Investment Core Competency Leverage II Fund, Samsung Securities, and four others. The funds raised from the CB issuance are planned to be used for acquiring other companies' securities (15 billion won) and for operating capital (8 billion won).

Kipspharma owns several subsidiaries: Kipsbiomed, which develops oral drug platforms; Bigthink, a distributor and seller of pharmaceuticals including anticancer drugs; KPT, which develops medical devices and pharmaceuticals; Algolbio, which develops new anticancer drugs; and Battery Solutions, a battery recycling company. In April, Kipspharma entered the pharmaceutical business by merging with Korea Global Pharm, a company specializing in ethical drugs (ETC), and its annual sales are expected to increase by approximately 35 to 40 billion won. Kipspharma is reportedly planning to use the new investment funds to acquire an additional pharmaceutical distributor.

The institutions participating in the investment are said to have focused not only on Kipspharma's improved competitiveness in pharmaceutical distribution, but also on the achievements of its subsidiary Kipsbiomed in developing oral treatments for obesity and diabetes. Currently marketed obesity treatments such as Wegovy (active ingredient: semaglutide) and Mounjaro (tirzepatide) are all injectable, making distribution difficult and offering low patient convenience.

However, oral medications generally have much lower bioavailability compared to injectables, raising concerns about reduced efficacy. For example, Novo Nordisk's "Rybelsus" showed a bioavailability of only 0.33% when 5mg was administered in animal studies (beagle dogs). Kipsbiomed's Oral Lloyd platform significantly improves the absorption rate of peptide drugs when administered orally, and in previous oral insulin experiments in rodents, it achieved an absorption rate of 35%.

Currently, Kipspharma is the only company in Korea developing oral treatments that is conducting non-clinical trials in primates. If the results of these non-clinical trials are favorable, it could lead to a technology transfer (LO).