Hanmi Pharmaceutical Appoints First External CEO in 53 Years... Can the "New Drug Powerhouse" Endure?

Hwang Sangyeon, CEO of HB Investment PE, Appointed as New Leader
Tasked with Resolving Conflict and Maintaining R&D Focus

Internal Strife Temporarily Settled by External Appointment
Ongoing Risk of Management Disputes Remains

Hanmi Pharmaceutical Group has signaled a major shift by appointing an external candidate as the new CEO of Hanmi Pharmaceutical for the first time in its 53-year history. This marks a complete turnaround from the group’s previous policy of promoting internal candidates. As CEO Park Jaehyun, who is stepping down at the end of his term, has clashed with major shareholder Shin Dongguk, Chairman of Hanyang Precision, concerns have emerged that internal strife could intensify and that the so-called “four-party alliance” could be fractured. The industry and the market are closely watching to see what results this unprecedented experiment will yield.

According to the pharmaceutical industry on March 12, the board of directors of Hanmi Pharmaceutical nominated Hwang Sangyeon, CEO of HB Investment Private Equity (PE), as a candidate for inside director the previous day. Hwang began his career as a researcher at the LG Chem Research Institute, later working as an analyst at Mirae Asset Securities and serving as CEO of Chong Kun Dang Holdings, thus accumulating experience in both the pharmaceutical/bio industry and the capital market. He was reportedly recommended as the next CEO by Chairman Shin. Hwang will begin his three-year term after the shareholders' meeting at the end of this month.

With Hwang's nomination, the dispute over management control appears to have been temporarily resolved. However, there are still concerns within and outside Hanmi Pharmaceutical that conflicts may re-emerge during future management processes. The new CEO faces the dual challenge of coordinating interests among major shareholders and maintaining the company’s existing R&D-focused management framework.

In particular, if differences in perspective between major shareholders resurface regarding appointments or key business strategies, there is speculation that clashes could occur within the board of directors. Reports that some directors expressed dissenting opinions at the previous day's board meeting support this view. It was also reported that Lim Jonghoon, CEO of Hanmi Fine Chemical and second son of the late founder Lim Sungki, opposed the nomination, citing concerns about Hwang's experience and expertise in the pharmaceutical industry.

The atmosphere inside the company remains unsettled. Some employees have expressed concerns about appointing an external candidate as CEO amid ongoing disputes over control. One employee said, "Chairman Shin has said he will not intervene in management, but the reality seems different," and added, "If the external CEO is replaced again, it could harm the company's external reputation." Another employee commented, "We just hope the research and development-centered approach emphasized by the previous generation will be maintained."

Amid lingering internal tensions over the group's governance structure, there are also concerns in some quarters that the group’s core engine for new drug development could be weakened. This year is considered a critical juncture for Hanmi Pharmaceutical's key pipeline development and revenue generation. In the second half of the year, the company plans to commercialize 'efeglenatide,' anticipated as Korea’s first obesity treatment, and is also set to announce Phase 2 clinical trial results for its MASH (metabolic dysfunction-associated steatohepatitis) treatment, which was licensed out to Merck (MSD). As the company approaches a period when major R&D achievements must be delivered, there are worries that appointing an external CEO with limited direct experience in the pharmaceutical field could undermine decision-making efficiency in development processes.

This overall sense of uncertainty has also been reflected in the stock price. Since tensions between Chairman Shin and CEO Park became public, the stock price has trended downward. After soaring to 644,000 won on February 24, the price dropped to 488,000 won at the close of trading the previous day, plunging more than 24% in just over two weeks. Hyemin Heo, analyst at Kiwoom Securities, diagnosed, "Ultimately, stabilizing governance is the most urgent task for a valuation re-rating." Hae Soon Kwon, analyst at Eugene Investment & Securities, also warned, "If the management dispute becomes prolonged, Hanmi Pharmaceutical’s intrinsic corporate capabilities could be undermined." Reported by Donghoon Chung, Jeongyeon Park, and Seongmin Lee.

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