K-Bio Arms Itself with 1.3 Trillion Won in 'R&D War' Funds in the First Half of the Year

Large-Scale Fundraising by Ligachem, D&D, Olix, and Others
Rising R&D Costs as Companies Enter Phase 2 and 3 Clinical Trials

Domestic biopharmaceutical companies specializing in new drug development are actively working to secure large-scale funding. As strategies seeking to enhance the value of drug candidates before licensing out technologies or directly commercializing them are spreading, companies are accelerating their efforts to preemptively secure funding for research and development (R&D), clinical trials, and manufacturing.

On August 19, The Asia Business Daily analyzed funding details for the first half of this year for nine major listed biotech firms that raised more than 10 billion won for new drug R&D, clinical trials, and preparations for production and commercialization, based on filings with the Financial Supervisory Service's electronic disclosure system. The total raising amounted to 1.2876 trillion won. Ligachem Bio secured the largest amount at 500 billion won, followed by D&D Pharmatech with 226.5 billion won, G2GBIO with 150 billion won, Olix with 110.8 billion won, and Inventage Lab with 98.5 billion won. Immunoncia raised 81.8 billion won, Cellbion 50 billion won, S-Biomedics 40 billion won, and Genome & Company 30 billion won, respectively.

The scale of fundraising has also increased across the entire pharmaceutical and biotech industry. In the first half of this year, proceeds from paid-in capital increases reached about 1.4 trillion won, up 66% from the same period last year. Issuance of mezzanine instruments, including convertible bonds (CB) and bonds with warrants (BW), expanded by 76.4% to 1.1965 trillion won. Combined, the two methods totaled up to 2.6 trillion won.

The company securing the largest development funding was Ligachem Bio. In June, Ligachem decided to raise 500 billion won through the issuance of convertible preferred shares (CPS) and CBs. This marks the National Growth Fund's first direct investment in a listed biotech company. Although Ligachem already holds substantial cash reserves, it secured additional long-term capital to independently develop its key antibody-drug conjugate (ADC) pipeline through Phase 2 and 3 clinical trials, secure next-generation technologies, and prepare for global launch. Its R&D expenses in the first half of the year reached 149.3 billion won, more than double the 72.6 billion won during the same period last year.

D&D Pharmatech issued CBs worth 226.5 billion won in April. Of this, 117.3 billion won will be invested in clinical trials and R&D for its pipeline, including the fibrosis treatment candidate 'TLY012.' Olix will utilize funds from its third-party paid-in capital increase of 110.8 billion won for RNA interference (RNAi) new drug development. BOLD, the venture capital arm of joint research partner L'Oreal Group, also participated in the capital increase. S-Biomedics plans to allocate the 40 billion won it raised for further development, including U.S. clinical trials of its Parkinson's cell therapy 'TED-A9.'

G2GBIO raised 150 billion won in February through CPS and CBs. Out of this, 90 billion won is earmarked as working capital for R&D and clinical trials, among other operations, while 60 billion won will be used to construct a second GMP-compliant manufacturing plant. The company seeks to prepare for not only R&D but also commercial-scale production in line with clinical advancements. Immunoncia and S-Biomedics have also begun securing funds for later-stage product development.

As the stages of new drug development progress, the costs that companies must bear inevitably increase. When licensing out technology at an early stage, partner companies shoulder subsequent development costs and the risk of failure, but if developers advance drugs through late-phase clinical trials themselves, they must absorb the costs. However, companies can secure greater value if they license out technologies or proceed to direct commercialization after advancing development stages.

An industry insider commented, "As domestic biotechs push their pipelines into late-stage clinical trials, the required scale of funding is fundamentally changing. The ability to raise funding that allows companies to develop good assets to the desired stage is becoming increasingly important," he said.

This content was produced with the assistance of AI translation services.