First-generation venture entrepreneur Lee Ki-hyung, chair of Gradiant, is accelerating a pivot in bio strategy. The focus is shifting from new drug development to bio services such as Organoid-based contract research (CRO) and in vitro diagnostics.
With losses continuing for years, there is an assessment that the company is restructuring around businesses capable of generating revenue relatively quickly, putting aside high-risk, long-term research and development (R&D) investments.
◇ "165 billion won from Yanolja sale injected" new drug subsidiary to be liquidated… "losses fully reflected"
According to the industry on the 20th, Gradiant is currently going through administrative procedures to liquidate Therapex Co., aiming to complete it within the year.
Since its establishment in 2020, Therapex Co. has pursued new drug development focused on a treatment for Non-small cell lung cancer (NSCLC), but it failed to secure visible clinical results. In Aug. last year, it succeeded in out-licensing the preclinical-stage candidate "TRX-211," but in Nov. of the same year it disclosed that development of the core pipeline "TRX-221" had been halted. The company cited strategic inefficiency as the reason for the suspension.
The organization was rapidly downsized afterward. Chief Executive Lee Gu, a new drug development expert formerly with LG Life Sciences, is also known to have recently left the company. The company said, "Since the suspension of clinical work last year, most research staff at Therapex Co. have been let go," adding, "Some personnel moved to GBCC."
Regarding the remaining candidates, it said, "We are reviewing a plan to transfer them to GBCC after accounting valuation," and added, "We plan to focus on the potential for out-licensing rather than further development."
Therapex Co.'s revenue last year was 1 billion won, or about 0.03% of Gradiant's 3.0615 trillion won in consolidation revenue. Net loss came to 9.254 billion won.
A company official said, "Of the roughly 200 billion to 300 billion won secured by selling the e-commerce division to Yanolja, 16.5 billion won was injected into Therapex Co."
Gradiant traces its roots to Interpark, which launched in 1996 as Korea's first internet shopping mall. Lee started the company as an in-house venture at Dacom, listed it on KOSDAQ in 1999, and in 2006 shifted to a holding company structure through a spin-off of business units.
It then expanded its scale around the B2B distribution business by acquiring iMarketKorea, a Samsung Group MRO (maintenance, repair and operations) affiliate, and Ahnyeon Care, a pharmaceutical distributor affiliated with Yonsei University Health System. It moved into the bio business in 2020 by establishing Interpark Bio Convergence (IBC).
After selling 70% equity in the e-commerce divisions—travel, performance, shopping, and books—to Yanolja in 2021, Interpark nurtured new drug development subsidiary Therapex Co. and Organoid corporation Gradiant Bio Convergence (GBCC) with IBC as the hub. The corporate name was changed in 2022.
◇ Aiming to preempt the 258 trillion won CRO market… "focus on technical capabilities over short-term profit and loss"
GBCC is focusing its capabilities on the CRO business. It plans to use its library of roughly 1,000 patient-derived Organoid (PDO) lines for biomarker discovery and efficacy assessments in the preclinical stage.
A company official explained, "We considered AI-based new drug development using genomic analysis data, but the expense and time burden are high, so we are currently adjusting our strategy to center on the CRO business."
This strategy has been taking shape since last year, when Nam In-bong, Gradiant's CEO, concurrently assumed the role of GBCC's CEO. In Oct. last year, Gradiant also decided to provide 4 billion won in lending to GBCC.
A company official said, "GBCC is in the process of advancing its CRO business," adding, "Because the Organoid market is changing rapidly, we decided to support funds through lending rather than a capital increase until specific business plans are finalized."
The official added, "As the business planning is in the final stages, we plan to recover funds through a paid-in capital increase going forward."
According to Fortune Business Insights, the North American CRO services market is expected to grow to $175.46 billion (about 258 trillion won) by 2032. GBCC's revenue last year was about 270 million won, and its net loss was 8.991 billion won.
It is interpreted in a similar context that Gradiant last year made Enbifostech, an in vitro diagnostic device corporation, a subsidiary. Enbifostech has liquid biopsy technology that uses atomic force microscopy (AFM). Alongside the Organoid-based CRO business, it is classified as a business with relatively high commercialization potential.
A company official said, "We are currently validating the potential to commercialize testing services through a U.S. CLIA Lab," adding, "We expect to secure research data as early as late this year or early next year." Depending on the results, it plans to review the timeline for filing for FDA approval.
The industry is watching whether Gradiant can return to the black through restructuring. Gradiant posted an operating loss of 29.5 billion won last year on a consolidation basis. The liquidation of Therapex Co. widened the deficit.
Gradiant's main revenue source at present is iMarketKorea. On a consolidation basis last year, iMarketKorea accounted for 1.9221 trillion won, or 61.71%, of revenue. However, that institutional sector operating profit and loss recorded a deficit of 7.945 billion won last year.