K-Bio Finding New Opportunities Through Attracting New Investors

Attracting Private Equity Funds and Large-Scale Equity Investments from Other Companies

Exterior view of Medipost headquarters in Pangyo, Seongnam-si, Gyeonggi Province (Photo by Medipost)

[Asia Economy Reporter Lee Chun-hee] Fierce competition for fundraising to find a way out after the COVID-19 pandemic has begun in the pharmaceutical and biotech industries. Recent incidents in the industry include existing founders handing over the largest shareholder position to private equity funds, and a solar power basic materials company becoming the largest shareholder of a pharmaceutical company.

According to the industry on the 20th, Medipost secured an investment worth 140 billion KRW involving a change of the largest shareholder from Skylake Equity Partners and Crescendo Equity Partners. Yang Yoon-sun, the founder and existing largest shareholder of Medipost, will maintain her position as the second largest shareholder and continue to participate in management.

This contract proceeds by Skylake and Crescendo’s subsidiaries or affiliates acquiring a total of 4,143,14 shares, combining 400,000 Medipost shares held by CEO Yang Yoon-sun and 3,740,314 voting convertible preferred shares newly issued through third-party allotment.

Specifically, subsidiaries or affiliates of Skylake and Crescendo will purchase Yang’s shares separately, and the 140 billion KRW investment will be made in two rounds of 70 billion KRW each. First, Skylake and Crescendo will jointly invest 70 billion KRW in convertible bonds (CB). Then, when the investment contract with a North American cell and gene therapy (CGT) contract development and manufacturing organization (CDMO) company, with which Medipost is currently in exclusive negotiations aiming for May, is finalized, an additional acquisition of 70 billion KRW worth of voting convertible preferred shares (CPS) will proceed.

Once all contracts are completed, Skylake and Crescendo’s shareholding in Medipost will rise to 20.7%, while CEO Yang’s stake, which was 6.2%, is expected to fall below 5%. Furthermore, if the convertible bonds are converted into common shares, Skylake and Crescendo’s shareholding will expand further. The investment shares by Skylake and Crescendo will be subject to a one-year lock-up at the Korea Securities Depository.

Medipost is a bio-specialized company focused on stem cell therapeutics and umbilical cord blood, having launched the knee osteoarthritis stem cell therapy product ‘Cartistem.’ Along with Cartistem, it has been accelerating the U.S. entry of another osteoarthritis treatment, ‘SMUP-IA-01.’

Medipost plans to use the secured funds as a foundation for entering the U.S. market. It will spend 85 billion KRW on investing in the North American CGT CDMO company and 55 billion KRW on clinical trials in the U.S. for Cartistem and SMUP-IA-01 to speed up entry into the U.S. osteoarthritis treatment market.

Recently, companies that had no relation to pharmaceuticals or biotech have also made large-scale equity investments in pharmaceutical companies, marking pharmaceutical and biotech businesses as new growth engines.

OCI, which produces polysilicon, a basic material for solar power generation, recently purchased 7,730,334 shares held by Kim Sang-hoon, President of Bukwang Pharm, and eight others for 146.1 billion KRW. Through this, OCI became the largest shareholder of Bukwang Pharm with an 11.2% stake.

Bukwang Pharm and OCI have been accumulating experience in joint management and investment cooperation through their jointly established joint venture ‘BNO Bio’ since 2018. With OCI’s equity investment, it is expected that the pharmaceutical and biotech expertise accumulated by Bukwang Pharm and the polysilicon capabilities and financial strength accumulated by OCI will combine to create strong synergy. Bukwang Pharm plans to increase the scale of strategic investments and expand its pipeline to accelerate growth going forward.

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