This year will see the largest number of Korean pharmaceutical companies seeking for stock market debuts to raise fresh funds for global market expansion, according to reports on Wednesday.
Amid growing market expectations, Green Cross LabCell and ST Pharm got the green light for new listing on the tech-heavy bourse KOSDAQ on Thursday. The two firms are part of a long list of bio companies starting to trade their new shares in the market.
In the first half of 2016, five companies went public and raised a combined 249 billion won ($216 million) through IPOs. Qurient and Antrogen went public in February, followed by PanGen Biotech in March.
So far, ST Pharm has shown the strongest IPO, at 135.2 billion won.
In the second half of the year, heavy lifters like Samsung BioLogics, Celltrion Healthcare, and CJ Healthcare have indicated that they will be listing as well.
Samsung BioLogics, in particular, is expected to be one of the biggest IPOs this year with industry analysts estimating about 3 trillion won worth of shares through the IPO. Through the listing, the company’s market valuation is expected to reach 10 trillion won, analysts say.
The rush to raise funds for R&D and production capacity increases by biopharmaceutical companies in Korea represents the hopeful mood in the industry following cases like Hanmi Pharmaceutical’s export contracts totaling 8 trillion won last year.
In a report last month, Kiwoom analyst Kim Joo-yong predicted that the Korean pharmaceutical industry would continue steady growth despite a sluggish market as companies began commercializing new drugs that had been in the works since the 1990s, and sped up growth by expanding exports.
Riding on the same momentum, pharmaceutical companies that are already publicly traded have turned to corporate bonds as a way to bring in additional funds.
Green Cross offered bonds for the first time in the company’s history last month, and expanded the offering from 100 billion to 150 billion won following unexpectedly high demand.
The company said that it will use the funds to expand its manufacturing facilities in Ochang, North Chungcheong Province, and Hwasun, South Jeolla Province.
Daewoong Pharmaceutical Co. also offered up corporate bonds in April, raising 100 billion won for a new plant in Osong, North Chungcheong Province.
By Won Ho-jung (
hjwon@heraldcorp.com)
