Over 20 biologics firms rev up engine for 2020 IPO

Over 20 Korean biologics firms are revving up their engines to go public in 2020.

DreamCIS, Psomagen, SCM Lifescience, Kainos Medicine and SK Biopharmaceuticals are set to list on main bourse Kospi and secondary Kosdaq before July. Market watchers are also keeping their eyes on HK inno.N Corp. (formerly CJ Healthcare), GI Innovation and Vuno. All in all, counting the firms who have requested stock market operator Korea Exchange for preliminary examination for listing, the biologics firms that may list this year reaches 20.

The first to cut the ribbon will be contract research organization DreamCIS, whose Kosdaq listing is slated for Friday. Genomics company Psomagen will chase DreamCIS on the secondary bourse Tuesday.

They aim to raise 20.2 billion won ($16.4 million) and 57.5 billion won, respectively.

SK Biopharmaceuticals, whose IPO had long been a topic of interest among investors as a biologics affiliate underneath the SK umbrella, said Tuesday that it has submitted the preliminary documents to list on Kospi. The company expects to complete the IPO application process in June and raise between 704.8 billion won to 959.3 billion won.

Taking a company public is interpreted as an indicator of its robust growth. It is that it is raising money to make a bigger leap, and that there are investors who see value in its business.

While the recent COVID-19 crisis has dampened the IPO market due to increased economic uncertainty and volatility, the biologics industry is showing resilience.

“The global pandemic has shown how businesses may be impeded by unforeseen factors such as overseas factory shutdowns and disruption of cross-border supply chains. But on the contrary, it could be said that the situation is better than usual for health care firms,” Korea Capital Market Institute’s researcher Hwang Sei-woon told The Korea Herald.

“After the COVID-19 pandemic subsides, companies that had temporary uplifting effects, such as in hand sanitizers and masks, may see dwindling demand but the general health care biologics companies will remain solid,” Hwang said.

Mirae Asset Daewoo’s analyst Jeong Dae-ro said in a report that SK Biopharmaceuticals’ imminent IPO is adding momentum to umbrella company SK Holdings’ corporate value.

The market valuation of SK Biopharmaceuticals is between 4 trillion won and 5 trillion won.

The wholly owned subsidiary of SK Holdings was established in 2011 to research and develop novel drugs that treat diseases pertaining to the central nervous system.

SK Biopharmaceuticals’ partial-onset seizure treatment Xcopri (cenobamate), made a soft landing in the US on May 12.

Cell therapy biotech SCM Lifescience, which initially planned to undergo the IPO process in March, had delayed the preliminary submission until early May, citing better investor relations activities amid appeased social distancing.

The company submitted a registration statement on May 12 and is expected to go public on Kosdaq within June.

Kainos Medicine that focuses on Parkinson’s Disease treatment which is listed on Konex will move to Kosdaq upon merger with Hana Financial Eleventh Special Purpose Acquisition Company, which is listed on the secondary bourse, in June.

Other firms that are commanding attention are GI Innovation, HK inno.N Corp. and Vuno.

GI Innovation, an innovative cancer treatment company whose market value is estimated to be in the trillion won range -- a rarity for a bioventure unassociated with conglomerates in Korea -- is also expected to go public before the year-end. The company recently appointed NH Investment and Securities and Hana Financial Investment as underwriters.

Vuno, a disruptive medical artificial intelligence solution firm, too is planning to go public this year, while HK inno.N Corp. is gearing up for an IPO under its new owner Kolmar Korea.

HK inno.N set its own record revenue of 542.6 billion in 2019. It was picked up by Kolmar Korea in 2018 for an approximate price of 1.3 trillion won.

By Lim Jeong-yeo (kaylalim@heraldcorp.com)