[THE INVESTOR] Bukwang Pharmaceutical has secured over 80 billion won (US$72.13 million) through its investments in biotechnology companies.
The investment return is 10 times bigger than its operating profit last year.
“The investments were made as a part of our efforts to expand the drug pipeline by searching for new drug candidates of other companies,” a company official told The Investor.
Unlike some other drug makers that recently launched their own investment divisions, its decisions for capital allocation is made by company researchers, he said.
“If a certain drug candidate with high potential meets the goals and needs of our product portfolio, then we will pursue a license deal. If not, we will make a direct or indirect investment,” he said.
The pharmaceutical firm also works with venture capital firms like TVM Capital Life Science, Medivate Partners and QUAD Investment Management to discover promising biotech firms.
The proceeds from selling stakes in firms it has invested in are mostly expected to be used for research and development of its new drugs. Bukwang spent some 30 billion won for its R&D in 2017.
Below are the biotech companies that Bukwang has invested in.
Bukwang reaped a big gain of around 40 billion won from Anterogen by the sale of its partial stake in the Seoul-based firm that specializes in developing cell therapy.
On Aug. 24, Bukwang said it would offload 400,000 shares of Anterogen for 40.8 billion won. This is a handsome return for the initial investment of 3.9 billion won Bukwang made to fetch 1.6 million shares.
Bukwang has been holding a stake in Anterogen since its early days of foundation in 2000. It became an 800 billion won worth company after it went public on the secondary KOSDAQ market in 2016.
Anterogen has cell therapy products using adipose-derived stem cells approved by Korean health authorities.
It also has six clinical-stage drug candidates for treating epidermolysis bullosa dystrophica, diabetic food ulcer, crohn’s disease, burn injury, osteoarthritis and tendon injury.
HLB Life Science
Earlier this month, Bukwang has returned exclusive rights to rivoceranib, an investigational gastric cancer as a third-line treatment, to its original developer HLB Life Science.
Bukwang sold the license to commercialize the drug in Korea for 40 billion won, compared to the 10 billion won it initially paid the biotech firm to bag the rights back in 2009.
Discovered by HLB Life Science’s US unit LSKB, rivoceranib is a small-molecule angiogenesis inhibitor and is undergoing phase 3 clinical study in gastric cancer.
Bukwang is expected to gain up to 33 billion won by disposing its 5.4 percent stake in Canada-based cancer drug developer AurKa Pharma with Eli Lilly’s decision to acquire the firm in May.
The Korean company will get 6 billion won from AurKa, as part of an upfront fee that it will receive from Eli Lilly. Further payment will be based on regulatory and sales milestones the Canadian company achieves.
It is one of successful investment cases that Bukwang committed for overseas companies. It invested 11.3 billion won to hold stakes in a total of 13 biotech firms in the US and Europe through funding programs launched by TVM Capital. Separately, it also holds a 7.3 stake in Acer Therapeutics, a US orphan pharma company listed on NASDAQ last year.
By Park Han-na (firstname.lastname@example.org)