The Korea Bio Association expressed its support for the Korea Exchange's proposal to improve the delisting system, which includes exempting listing maintenance revenue requirements for corporations listed on the KOSDAQ with a market capitalization of over 60 billion won.
The Korea Bio Association noted, "We greatly welcome the fact that the recently announced measures to improve the delisting system were revised with consideration for enhancing market soundness and increasing the value of listed bio corporations," on the 23rd.
Earlier, the Financial Services Commission, Financial Supervisory Service, Korea Exchange, Korea Financial Investment Association, and Capital Market Research Institute jointly held a seminar on the improvement of initial public offerings (IPO) and delisting systems on the 21st, where they announced the plan for improving the delisting system.
The key point of this improvement plan is to gradually raise the current delisting standards—50 billion won market capitalization and 5 billion won revenue for KOSPI; 40 billion won market capitalization and 3 billion won revenue for KOSDAQ—over the next three years from 2026 to 2028. Accordingly, corporations with a market capitalization of 50 billion won and revenue of 30 billion won or less will be excluded from the KOSPI market, while corporations with a market capitalization of 30 billion won and revenue of 10 billion won or less will be excluded from the KOSDAQ market.
The majority of bio corporations enter the KOSDAQ market through a technology exception system that evaluates their technological capabilities. According to the proposed plan, the revenue standards for maintaining KOSDAQ listings will increase from the current 3 billion won to 5 billion won in 2027, 7.5 billion won in 2028, and 10 billion won in 2029.
This strengthening of revenue requirements may burden corporations that have technological capabilities and growth potential but are struggling with revenue; however, the financial authorities have considered this and created a buffer. Starting in 2027, if a corporation's market capitalization exceeds 60 billion won, it will be exempt from the revenue standards. In other words, a corporation can avoid delisting as long as its market capitalization exceeds 60 billion won, even if its revenue is below 10 billion won.
In response, the association stated, "Considering the reality of the bio industry, where it takes longer than other industries to generate revenue and realize profits, we view this positively." Under the current technology exception system, there is a grace period of 5 years during which revenue requirements are waived, and with this revision, bio corporations that have entered the market through a technology exception will be able to waive the revenue requirements if they achieve a market capitalization of over 60 billion won in their sixth year.
The association commented, "This is a positive measure that respects market evaluations, as it aims to prevent bio corporations listed under the technology exceptions from engaging in unrelated businesses or acquisitions to meet revenue criteria, focusing instead on enhancing their fundamental business value through new drug development research."
However, the association expressed disappointment that the improvement plan does not address measures related to legal losses (losses before tax expenses for continuing projects) which is one of the criteria for designating management items. The association proposed measures such as waiving legal loss standards when certain market capitalization thresholds are met, applying principles similar to the revenue criteria.