This article was published on June 17, 2025, at 4:45 p.m. on the ChosunBiz MoneyMove site.
Private equity firm Praxis Capital Partners is on the verge of a successful exit with biotech D&D Pharmatech for new drug development. After starting to ride the obesity theme last month, the firm sold a portion of its stake and plans to dispose of the remaining shares in the second half of the year.
D&D Pharmatech barely entered the stock market in May last year after repeated listing failures. At the time, there were concerns about investment performance within and outside Praxis Capital, but the stock price has recently surged due to the proof of treatment efficacy.
According to the financial investment industry on the 17th, the value of the approximately 3% stake that Praxis Capital holds in D&D Pharmatech was estimated at 42.5 billion won based on the closing price of 136,100 won. Considering that the value of its initial stake of 5.99% when it listed in May last year was around 20.6 billion won, the equity rate has dropped to half, but its stake value has rather increased.
The stock price, which had stayed around 40,000 won until the end of the first quarter, skyrocketed to 60,000 won in April and 90,000 won in May, leading to an increase in equity value. In particular, as D&D Pharmatech's glucagon-like peptide-1 (GLP-1), originally developed as a diabetes treatment, gained market attention as an obesity treatment, the stock price soared to 100,000 won this month.
The recovery of the investment principal is understood to have already been completed. Praxis Capital participated in the pre-IPO fundraising for D&D Pharmatech in October 2021, investing about 30 billion won, and began sequentially selling off its equity starting with the sale of 107,100 shares on May 15, selling about 310,000 shares at an average price of 96,000 won each.
D&D Pharmatech has been viewed as the painful sore spot for Praxis Capital. The initial attempt to list D&D Pharmatech was abandoned in October 2021 when it participated in the pre-IPO fundraising and invested 30 billion won, but the listing was repeatedly unsuccessful. After failing to list again in 2022, it finally entered the stock market last year, three years after the initial investment.
Since the listing, the evaluation losses have continued. The repeated listing failures significantly suppressed its value. D&D Pharmatech listed at a market capitalization of 344.3 billion won based on a confirmed public offering price of 33,000 won per share. Praxis Capital had previously estimated D&D Pharmatech's value at over 500 billion won three years ago during the pre-IPO. The per-share unit price was assessed to be 48,000 won.
Praxis Capital has judged that D&D Pharmatech's corporate value is undervalued and has reportedly been waiting for a re-evaluation. Even as Smilegate Investment, the largest financial investor among D&D Pharmatech's initial investors, has continued to withdraw investments since July last year, Praxis Capital has delayed its exit.
The market expects that Praxis Capital will earn more than double its investment principal from the exit of D&D Pharmatech. Following the news that the GLP-1-based treatment for metabolic dysfunction-associated fatty liver disease (MASH) named 'DD01' proved its efficacy in U.S. Phase 2 clinical trials, the stock price surpassed 120,000 won and rose again on that day, nearing 140,000 won.
An industry insider noted, "D&D Pharmatech's market capitalization based on the closing price that day was 1.4498 trillion won, quadrupling from its listing market capitalization, and most initial investors have completed their withdrawals, so there are few concerns about an overhang." He added, "Praxis Capital is planning to sequentially sell its stake in the second half of the year, with a high possibility of recording more than three times the return compared to the investment principal."