[Bio Shaking the Market] Helixmith, Why Does the Largest Shareholder's Son Hold Shares in the Subsidiary?

[Asia Economy Reporter Jang Hyowon] It has been confirmed that Kim Sun-young, CEO of Helixmith, and her eldest son Kim Hong-geun hold significant shares in the ‘spin-off’ subsidiaries established by Helixmith last year. Market opinions suggest that a high ownership stake by the owner family in subsidiaries could make it difficult to attract investment.

Research by Helixmith, but results belong to subsidiary shareholders

According to related industries on the 16th, Helixmith established subsidiaries Neuromyon and Cartexell in May last year. These were created by contributing patents previously held by Helixmith as in-kind contributions.

Neuromyon is a biopharmaceutical development company planning to develop gene therapies for neuromuscular diseases primarily using AAV (adeno-associated virus) viral vectors. Cartexell is an anticancer drug development company planning to develop anticancer drugs targeting solid tumors using CAR-T cells.

The reason for establishing subsidiaries was to facilitate external fundraising. From an investor’s perspective, investing in subsidiaries holding individual pipelines is more advantageous for selection and concentration than investing in a single company with multiple pipelines.

Neuromyon and Cartexell are expected to conduct full-scale research at Helixmith’s facilities. Helixmith plans to invest 13.9 billion KRW from funds raised through a rights offering at the end of last year to build equipment and facilities for AAV gene non-GMP production and analysis, as well as equipment for CAR-T manufacturing and GMP production and analysis of cell and gene therapies.

In this case, since Neuromyon and Cartexell, as patent holders, only need to pay Helixmith a certain amount of research expenses, the research outcomes will belong to the shareholders and investors of Neuromyon and Cartexell.

A Neuromyon official stated, “We are still in the stage of preparing for clinical trials, so nothing has been decided yet.”

Half of subsidiary shares held by management... Can they attract investment?

It appears that Helixmith will not fully own the research outcomes of Neuromyon and Cartexell. Although Neuromyon and Cartexell were spun off from Helixmith through a physical division, they are not 100% subsidiaries.

Helixmith holds a 58.08% stake in Neuromyon. The second-largest shareholder is Kim Sun-young, CEO of Helixmith, holding 19.18%. The third-largest shareholder is Kim’s eldest son, Kim Hong-geun, with 7.83%. Considering Neuromyon’s capital of 1.277 billion KRW, Kim and Kim invested approximately 240 million KRW and 100 million KRW respectively.

Neuromyon was established in May last year with a capital of 140 million KRW and increased its capital to the current scale through two rounds of capital increases in August and October. The timing of Neuromyon’s capital increases coincided with Helixmith’s rights offering. At that time, CEO Kim Sun-young did not participate in Helixmith’s capital increase due to lack of funds.

Cartexell also lists Kim and Kim as major shareholders. Helixmith is the largest shareholder with 48.14%. Kim is the second-largest shareholder with 13.76%, and Helixmith CEO Yoo Seung-shin is the third-largest with 11.34%. Kim Hong-geun holds 10.88%, making him the fourth-largest shareholder.

Regarding this, the company stated in an IR letter, “The shareholder composition and shareholding ratios of Neuromyon and Cartexell were determined considering employees’ contributions to the company (fundraising, clinical trials, basic experiments), feedback from the investment industry, and individual circumstances.”

However, they did not respond to inquiries about what contributions Kim Hong-geun, CEO Kim Sun-young’s eldest son, makes to Neuromyon and Cartexell. Born in 1993, Kim is known to have worked at Golden Helix, Helixmith’s investment subsidiary, last year. Golden Helix was finally liquidated in January this year.

An investment industry official said, “It is uncommon for management’s stake to exceed 5% even when a bio company spins off. A company where the owner or management holds about half the shares will find it difficult to attract investment.”

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