Yuhan Corporation Deliberates Unusually Long on Next CEO to Follow 'Leclaza Success'

Deadline passes without next CEO candidate being finalized
Internal stability and R&D expertise are key
'Post-Leclaza' strategy is a central challenge

Yuhan Corporation's deliberations over the appointment of its next CEO are continuing. The company appears to be weighing whether to uphold its tradition of promoting from within or entrust management to an R&D expert recruited from outside.

According to the pharmaceutical industry on November 4, Yuhan Corporation failed to finalize a candidate for its next CEO at a regular board meeting held on October 28. The board reportedly discussed the process and plans for selecting a successor but did not proceed to specific discussions on choosing a candidate. The term of CEO Cho Wookje, who took office in 2021 and was reappointed once, expires in March next year. Yuhan Corporation's CEO succession policy calls for a final candidate to be selected about six months before the regular shareholders' meeting. Given that this guideline has generally been followed with ample time to spare, the current situation is considered unusual. One analysis is that the management and competitive environment in the industry is changing rapidly, making the decision-making process far more complex than in previous years.

A key task for the next leader is widely seen as developing new drugs to follow the success of its cancer drug, Leclaza. The company needs to expand R&D investment to secure new growth drivers while generating stable revenue based on Leclaza. Its allergy drug, lesigercept, is in global Phase 2 clinical trials, but it is expected to take time before a follow-on drug delivers commercial results.

Those mentioned as potential candidates include Kim Yeolhong, president overseeing R&D; Lee Byungman, head of the Management Planning Division and a vice president; and Yoo Jaechun, head of the Pharmaceutical Business Division and a vice president. Kim, a former professor at Korea University's College of Medicine, was recruited from outside the company in 2023 to strengthen its drug development capabilities. With identifying follow-on drug candidates and establishing development strategies becoming increasingly important, attention is growing around the role of Kim, whose strength lies in R&D expertise.

The internal candidates are seen as having extensive management experience and a strong understanding of the organization. Lee, who joined Yuhan Corporation in 1986, has worked in sales and the pharmaceutical business and now leads the company's overall management planning. Yoo, who joined in 1994, leads the pharmaceutical business, a key source of revenue, drawing on his experience in sales of both prescription and over-the-counter medicines. Some observers say that candidates from within, who have worked at the company for a long time, may have a relative advantage in gaining the organization's trust and support.

The position of president overseeing R&D, newly established in 2023, is also considered a factor in the appointment. If the company follows the succession approach used in the past two appointments and names an internal vice president as executive vice president, how to divide roles and authority with Kim, the president overseeing R&D, will also be a focus. If Kim is appointed, he would become the company's first externally recruited CEO in about 40 years, since former CEO Park Chungeo, who served from 1979 to 1985.

A co-CEO system in which drug development and management planning are handled separately is also being discussed. Yuhan Corporation previously operated a co-CEO system from 2009 to 2012. "Even if someone from within the company becomes CEO, the direction of R&D investment is unlikely to change," an industry official said. "The key will be whether the company can increase the investment needed to develop follow-on drugs while maintaining stable growth in its existing businesses."

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