SK Biopharmaceuticals eyes $790M blockbuster IPO in July
SEOUL-BASED seizure treatment developer SK Biopharmaceuticals Co Ltd on Monday said it is planning what could be South Korea’s biggest initial public offering (IPO) in three years, with hopes to raise 959.34 billion won ($790 million) in fresh funds.
SK Biopharmaceuticals is the drug development unit of the country’s third-largest conglomerate SK.
Its market debut on South Korea’s main bourse Kospi would mark the largest fundraising attempt since Celltrion Healthcare Co Ltd’s listing in July 2017. The IPO will help it enhance its global expansion, it said, citing its US launch last month of Xcopri, a brand name of adult anti-epilepsy treatment cenobamate.
The company added cenobamate to its sales line-up that mainly comprised sleep disorder drug solriamfetol, known with its brand name Sunosi.
Unlike solriamfetol, cenobamate will be sold directly in the US through the firm’s own sales network led by Sebby Borriello, chief commercial officer of US subsidiary SK Life Science Inc, to maximise its profits.
SK Biopharmaceuticals CEO Cho Jeong-woo said cenobamate aims to pursue a 100 per cent removal of epilepsy patients’ seizures.
According to its prospectus for its listing on Kospi, released earlier this month, the IPO proceeds will be used mainly to ramp up the marketing and production of cenobamate.
The fresh capital will also add fuel to research and development of its commercial and clinical-stage drugs to cure epilipsy, schizophrenia, attention deficit hyperactivity disorder and rare neurological diseases, in its bid to address unmet medical needs in the US. SK Biopharmaceuticals plans to utilise the proceeds by next year.
With high anticipation to the deal, the share price of SK Holdings Co Ltd soared more than 12 per cent as of 2pm, on Monday. SK Biopharmaceuticals is wholly owned by SK Holdings, the holding company of energy-to-chipmaking conglomerate SK Group.
SK Biopharmaceuticals is looking to issue 13.3 million new shares and existing 6.3 million shares owned by parent SK Holdings up for fundraising via the IPO.
After its market debut, SK Holdings will control 75 per cent stake. NH Investment & Securities and Citigroup Global Market Securities Korea are lead underwriters of the deal, and four more underwriters, including Morgan Stanley’s Seoul branch, are poised to participate.
The CEO dismissed market concerns over the lingering Covid-19 impact on the IPO drive, saying that the pandemic was not critical enough to put off the plan.
Cho said: “We made an internal decision that there was no reason to put off our IPO plans.
“No matter how serious the coronavirus would be, those affected by epilepsy still suffer from seizures.”
Headquartered in Pangyo, a technology hub in Gyeonggi province’s south, SK Biopharmaceuticals has presence in the US and Shanghai markets.
SK Biopharmaceuticals logged a 71.5 billion won net loss and a 79.3 billion won operating loss last year.
Following a two-month hiatus due to the staggering coroanvirus impact, South Korea’s IPO market is picking up speed since last month.
Pharmaceutical contract research ser v ice prov ider DreamCIS Inc went public last month, while stem cell therapy firm SCM LifeScience Co Ltd and screen inspection k it maker LeadingEdge Technolog y Co Ltd have wrapped up their IPOs for June listing. Diagnostic k it maker Gencurix Inc is receiv ing t he reta il investor subscription for its IPO.
Institutional investors’ subscriptions for SK Biopharmaceuticals shares are poised to take place from Wednesday to Thursday to determine the size of the IPO.