Bio companies eye stock market debuts amid improved performance

Photo by MK DB

Biotech companies in South Korea are making moves to join the country’s stock market as the business environment improves.

According to sources from the securities industry on Thursday, 3billion Inc., a company specializing in diagnostic tests for rare genetic disorders, submitted a securities report to the Financial Services Commission on Wednesday as it prepares for an initial public offering in October 2024 on the secondary Kosdaq market.

Founded in 2016, 3billion has developed technology to identify genetic mutations that cause diseases using artificial intelligence (AI).

The company had applied for a listing review in 2022, only to withdraw after four months. Since then, it has ramped up its revenue and is now making another attempt to enter the stock market.

Other companies, such as CellBion Co., a specialist in radiopharmaceutical drug development, and HEM Pharma Inc., a company with microbiome simulator technology, also submitted securities reports this month and are beginning the IPO process.

This marks the third attempt for CellBion, which sought to go public in 2018 and 2021, but withdrew both times before completing the process.

This positive development is attributable to the recent successful market debuts of several biotech companies.

ENCell Co., a company specializing in cell and gene therapy contract development and manufacturing (CGT CDMO), went public on August 23rd after spending about nine months in the preliminary listing review.

Despite delays due to requests from the Financial Supervisory Service for amendments to its securities report, the company managed to double its IPO price on its first trading day and hit the price ceiling on Thursday.

TDS Pharm Co., a company specializing in transdermal drug delivery products, had also faced two amendments to its securities report but once it joined, it saw its stock price quadruple from its IPO price on its first trading day on August 21st, 2024.

Nextbiomedical Co., an innovative medical materials company, also made a successful debut on its second attempt.

After an unsuccessful bid in June 2022, the company went public on the Kosdaq on August 20th, 2024, but saw its stock price drop by about 18 percent from its IPO price of 29,000 won ($ 21.78) on its first trading day.

The stock, however, has since rebounded and is currently trading at about 21 percent above its offering price.

These successful debuts of new biotech stocks stand in stark contrast to the beginning of 2024, when many bio companies, including Pinotbio Inc., Koru Pharma Co., Optolane Technologies Inc., and HysensBio Co., voluntarily withdrew their IPO applications.

This favorable atmosphere in the biotech IPO market is likely due to the strong performance of biotech stocks, even when the overall domestic stock market remains flat.

Major biotech stocks have been rallying to new highs on the back of expectations of a U.S. interest rate cut and the push to deregulate biosimilars.