Drug equity investments see big returns

Korean pharmaceutical companies have posted hefty returns from their equity investments in domestic and foreign bio startups, data showed Wednesday.

According to the data from the Financial Supervisory Service, pharmaceutical giant Yuhan sold some 400,000 shares of Genexine, a clinical stage biotechnology company listed on the secondary stock market, for 35.9 billion won ($33.3 million) in the first quarter of this year.

The proceeds were well in excess of Yuhan’s initial investment of 20 billion won made in December 2015.

The equity sale reduced Yuhan’s holdings of Genexine to 110,000 shares as of the end of March, but Yuhan’s stake is expected to rise again as it is poised to participate in Genexine’s planned rights offering.

Yuhan plans to spend 30 billion won to purchase 332,000 shares of Genexine’s preferred shares.

Industry watchers said Yuhan will make an additional investment in Genexine because of its growth potential. Genexine has developed long-acting growth hormones and candidates of cancer immunotherapy.

In the first quarter, Yuhan also generated a return of 30 billion won from the disposal of 223,800 shares of local bio venture company Hanall Biopharma, which it bought for 30 billion won in 2012.

Mid-sized industry player Handok Pharmaceuticals has profited from its 2012 investment of 30 billion won in Genexine. Handok has sold 40 billion won of Genexine shares.

Yonhap