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Biotechnology

SK Biopharm highlights drugs pipeline ahead of planned $800m IPO

South Korean drugmaker to start clinical test for anticancer treatment next year

If the float goes as planned, it would be the country's largest IPO since 2017.   © Reuters

SEOUL -- South Korean drugmaker SK Biopharmaceuticals started the run-in to its $800 million initial public offering by offering more details of its development pipeline, saying it would begin clinical trials of a cancer treatment next year.

The share offering by SK Biopharmaceutical is expected to be the biggest in South Korea for three years. It comes as the country's pharmaceutical industry has gained global attention thanks to South Korea's swift response to the coronavirus outbreak.

SK Biopharmaceuticals has been hosting roadshows for investors at home and abroad to sell its plan to float 19.6 million shares, or a 25% stake in the company, on Seoul's main stock market on July 2. The price for the IPO is expected to be between 36,000 won and 49,000 won per share, raising between 705 billion won and 953 billion won. It will be confirmed at the end of this week after bankers assess demand from local and foreign investors.

The company is a fully owned subsidiary of SK Holdings, the country's third-largest conglomerate.

Cho Jeong-woo, CEO of SK Biopharmaceuticals, said the company expected to start clinical tests for an anti-brain tumor drug next year, adding it to the company's pipeline. "We expect to enter clinical [tests] for a new anticancer drug next year," said Cho in an online news conference. "It will be developed along with ADHD, schizophrenia and bipolar disorder drugs."

SK Biopharma paved the way for the IPO last year by winning approval in the U.S. for Xcopri, an epilepsy treatment.

Analysts say the company has changed the model for South Korea's bio industry by reaching the global market directly. Typically, most domestic pharmaceutical companies have transferred drugs under development to other global companies once they reach early clinical trials.

"SK Biopharmaceuticals has turned the formula for pharmaceutical firms' global strategy upside down," said Sun Min-jung, an analyst at Hana Financial Investment.

At the Monday news conference, Cho said the company was confident despite the coronavirus pandemic, as many investors showed big interest. "We are encouraged with their interest," he said.

Shares of SK, the parent of SK Biopharmaceuticals, were up 8.96% on Monday.

It would be the largest IPO in South Korea since Celltrion Healthcare, an affiliate of rival Celltrion, raised 1 trillion won in 2017.

Incheon-based Celltrion has since pinned development in the Asian market on acquisitions. It announced on Thursday that it signed a 332.4 billion won contract to buy Japanese drugmaker Takeda Pharmaceuticals International's primary care business in the Asia-Pacific region.

The deal gives the company rights to the patents, brands and sales of 18 Takeda drugs in nine countries, including South Korea, Thailand and Taiwan.

"This acquisition of Takeda's productions in the Asia-Pacific region will help us emerge as a comprehensive global biopharmaceutical company, as we can produce diabetes and high blood pressure treatments, which we relied on foreign companies to produce in the past," said Celltrion CEO Ki Woo-sung.

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