‘Big Fish’ SK Biopharm's IPO Kickoff Causes Stir at SK Too

SK Biopharm Submits Securities Registration Statement... Begins Listing on KOSPI
Major Shareholder SK Co., Ltd. Recovers 200,000 KRW Level, Showing Upward Trend

[Asia Economy Reporter Eunmo Koo] As the listing of SK Group's new drug development bio company SK Biopharm, regarded as the biggest IPO in the domestic market this year, becomes more visible, the stock price of SK, the largest shareholder, is also gaining strength.

According to the Korea Exchange on the 20th, SK's stock price has risen 10.7% so far this month until the previous day. On the 18th, the closing price recovered to the 200,000 KRW level for the first time in about two months since March 5 (205,000 KRW), regaining the pre-COVID-19 crisis stock price. During the same period, SK Preferred Stock (SK Woo) recorded a significant gain of 38.1%, and notably, it reached 237,500 KRW intraday the previous day, setting a new 52-week high. The affiliate SK Bioland also set a new high the previous day, showing a 68.3% return just this month.

The day before, SK Biopharm officially initiated the listing process on the KOSPI market by submitting a securities registration statement to the Financial Supervisory Service. The number of shares offered to the public is 19,578,310 shares, which is 25% of the total shares (13,313,250 new shares and 6,265,060 existing shares). The expected public offering price range is 36,000 to 49,000 KRW, with an anticipated offering amount of 704.8 billion to 959.3 billion KRW. The demand forecast for institutional investors will begin on May 17-18, followed by the general subscription on May 23-24, with plans to complete the listing within June. The lead underwriters are NH Investment & Securities and Citigroup Global Markets Korea, with co-underwriters Korea Investment & Securities and Morgan Stanley.

SK Biopharm is the first domestic company to hold two new drugs approved by the U.S. Food and Drug Administration (FDA) and is a wholly owned subsidiary of SK. The epilepsy treatment drug developed by SK Biopharm, Xcopri (cenobamate), received FDA approval for marketing in November last year and began sales in the U.S. market on the 12th of this month. Previously, the sleep disorder treatment drug Sunosi has also been sold in the U.S. since July last year.

SK's stock price is expected to maintain a stable trend even after SK Biopharm's listing. Since SK holds a high level of control over SK Biopharm, the value of its equity stake can continue to be highlighted. Han Lee Kim, a researcher at KTB Investment & Securities, explained, "Given the characteristic of holding companies' stock prices rising in tandem with the value of their listed equity, SK's stock price can rise alongside SK Biopharm without any temporary decline."

Currently, SK Biopharm has a total of 65 million shares, and the number of shares SK will offer in this IPO is 6,265,060 shares. Including the issuance of new shares, SK's stake will be 75%. SK plans to minimize the sale of existing shares and instead raise funds for new drug development through new share issuance.

There is also an assessment that dividends will not be affected. Jangwon Kim, a researcher at IBK Investment & Securities, forecasted, "Although the first-quarter performance may raise doubts about shareholder returns due to the poor performance of the main affiliate SK Innovation, the sale of China Gas Holdings shares generated a capital gain of over one trillion KRW, and with the proceeds from SK Biopharm's share sale secured, the current annual dividend total of 267.9 billion KRW can at least be maintained."

This content was produced with the assistance of AI translation services.