With momentum from FDA OK, SK Biopharma to breath new life into Korean biotech with $850M IPO — report
SK Life Science’s recent success at the FDA is setting its parent company nicely for a $850 million IPO in Korea, the Financial Times reported.
The group — a subsidiary of the conglomerate SK Holdings dedicated to drug discovery and development — filed its preliminary application to the Korea Exchange late last month. But the recent US approval for epilepsy drug Xcopri, or cenobamate, raised analysts’ expectations on the amount they can bag.
“Given the current market circumstances, they will be able to raise more than Won1tn,” an investment banker close to the deal told the FT. That translates to over $849 million.
Local analysts quoted by the paper are pegging Xcopri’s value at more than $4.67 billion (Won5.5tn) — which would buoy the company’s market value close to $6.8 billion (Won8tn).
A strong new entrant would bring some needed energy to South Korea’s biotech sector, whose reputation has suffered in scandal after scandal involving some of its bellwether companies. Government officials have launched probes against several alleged serious misconducts: Hanmi hiding patient deaths and trial failures from the public, Samsung BioLogics inflating its value to get listed on the stock exchange, SillaJen executives engaging in insider trading ahead of a disappointing clinical announcement. Other bad news, such as the implosion of Helixmith’s plasmid product, have further shaken investors’ confidence.
SK Biopharma can look to burnish its prospects with a planned launch of Xcopri in the second quarter of 2020 — pending DEA scheduling — as well as the muscle and commitment provided by the giant corporation it’s tethered to.
Chief commercial officer Sebby Borriello previously told Endpoints News that they plan to eventually market the drug in Korea, Japan and China as well, while partner (and Axovant spinout) Arvelle Therapeutics handles Europe.
“The market is likely to recover next year on the back of SK’s debut, although investor sentiment and expectations for new blockbuster drugs have been damped by failed clinical trials this year,” wrote Sun Min-jung, an analyst at Hana Financial Group, in a reported quoted by the FT.
The company has selected Citigroup and NH Investment & Securities as lead managers for the IPO deal, which is expected to close in January.
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