CHA Biotech ended its professional manager system and shifted to an Oner-led management system. The company held a board meeting on the 4th and appointed Cha Won-tae, vice chair of CHA Hospital·CHA Bio Group, as CEO.
The new CEO, Cha Won-tae, is the eldest son of founder Cha Kwang-ryul, head of the Global Research Institute of CHA Hospital·CHA Bio Group, who built CHA Bio Group, and the grandson of the late Cha Kyung-seop, honorary chair of CHA University·CHA Hospital. This is the first time a member of the controlling family has directly taken the helm at CHA Biotech. The market is expressing expectations for stronger accountable management. Attention is on whether Cha can solve the task of improving profitability.
An obstetrician-gynecologist and the founder of CHA Bio Group, Institute Director Cha Kwang-ryul is an authority who has gained global recognition in infertility, stem cells, and regenerative medicine. In 1998, he pioneered a new path in infertility treatment by developing the world's first method of rapid oocyte freezing (vitrified oocyte cryopreservation). The oocyte bank first established by Cha at that time has now become the global standard.
CHA Biotech was established in Nov. 2002 to conduct stem cell research and develop therapeutics within the CHA Hospital Group. Its main businesses now include cord blood storage, cell and gene therapy (CGT) research and development (R&D), CGT contract development and manufacturing (CDMO), and healthcare IT.
◇ Ownership family·foundation-entangled governance…clear Cha Kwang-ryul–Cha Won-tae succession
Inside and outside the group, the appointment of Vice Chair Cha Won-tae as CEO is being seen as a foreseen change. An official within the group said, "Given that Cha was appointed as an inside director early this year, this was the expected sequence." Cha Won-tae is currently spearheading the group's restructuring. The management succession structure has entered full swing.
Cha Won-tae began taking a full-fledged front-line role in management in Sept. last year. He previously served as chief operating officer (COO) of CHA Health Systems, which operates Hollywood Presbyterian Medical Center in Los Angeles (LA), and as chief strategy officer (CSO) of Hollywood Presbyterian Medical Center, and he also served as president of CHA University. He was then appointed vice chair of CHA Hospital·CHA Bio Group and CSO of CHA Biotech in Sept. last year, followed by elevation to inside director at CHA Biotech in Jan. this year.
CHA Biotech's governance combines the controlling family, affiliates, and foundations. As of a Feb. disclosure, the largest individual shareholder is Cha Kwang-ryul, head of the Global Research Institute of CHA Hospital·CHA Bio Group (former title: chair), with an equity stake of 4.34%. Unlisted KH Green, which functions as a holding company, holds 9.4%, indirectly controlling CHA Biotech through it. KH Green is controlled by Cha's family.
Vice Chair Cha Won-tae's equity stake in CHA Biotech is 3.31%, the highest among the institute director's three children. Cha's eldest son, Cha Min-je (0.04%), is also listed as a specially related party. In addition, group foundations such as Sungkwang Academy (which runs CHA University) and Sungkwang Medical Foundation hold more than about 4% equity, serving as friendly stakes. Combining the largest shareholder and specially related parties brings the total to around 25%, leading to the assessment that management control is relatively stable.
◇ Beyond top-line growth, the task of breaking through losses
The key task facing CHA Biotech is improving profitability. On a consolidation basis last year, the company posted about 1.2683 trillion won in revenue, up 21.4% from a year earlier. During the same period, operating loss came to about 47.5 billion won, extending the deficit, and the book net loss also widened to about 139.2 billion won from a year earlier. On a separate basis, last year's revenue was 62.2 billion won, operating loss 4.7 billion won, and net loss 33 billion won.
While the company's scale is growing through R&D investment and business expansion, there are assessments that the financial burden is also increasing. On a consolidation basis, loss before corporate tax expense jumped to the 130 billion won range in one year from about 6.2 billion won a year earlier. This is about 16% of CHA Biotech's capital (about 820.3 billion won). Though not at the stage of capital erosion, the pace of loss expansion is raising concerns about financial soundness.
The company said, "Expenses increased due to investment in new businesses at U.S. subsidiary Matica Biotechnology, higher construction expenses for a new ward at Hollywood Presbyterian Medical Center in LA, and expanded investment in the R&D pipeline."
It added, "Non-cash factors such as fair value assessments of convertible bonds (CB), bonds with warrants (BW), exchangeable bonds (EB), and redeemable convertible preferred shares (RCPS), as well as accounting interest and foreign exchange losses caused by exchange rate fluctuations, also affected book net loss."
Cha recently said, "We will restructure CHA Bio Group's core businesses around three pillars—CGT, healthcare, and life sciences—to build a sustainable growth structure." With the change in the CEO system, there is also speculation that CHA Biotech's organizational structure and business strategy could change.
CHA Biotech is simultaneously pursuing development of autologous and allogeneic cell therapies for new drugs. Nam Su-yeon, who joined CHA Biotech in June 2024, is leading R&D. Nam is one of Korea's leading new drug development experts, having discovered the anticancer drug Leclaza at Yuhan and achieved multiple technology export results at GI Innovation.
The core pipeline is CHANK-101, an immune cell therapy using NK cells. Development is currently underway with liver cancer as the indication. Having completed phase 1 in 2022, it is considered a candidate with potential for conditional approval within the year under the Advanced Regenerative Medicine Act system. The company submitted an advanced regenerative medicine treatment plan for liver cancer last year. If conditional approval is granted, commercialization could be moved up.
CHATIL-101, a cell therapy with ovarian cancer as the indication, is also under development. Selected last year as a task supported by the Korea Drug Development Fund program, it is receiving research and development funding from the government through 2027, and plans to seek conditional therapeutic approval based on clinical data obtained.
A consortium formed by CHA Biotech with CHA University and CHA Bundang Medical Center was selected last year by the Ministry of Health and Welfare as the national cell-specialized research institute for the "Global K-cell bank·library buildout." A total of 45 billion won will be invested in this project by 2028.
Another key pillar is digital healthcare that combines IT technologies such as cloud and artificial intelligence (AI). The company, in cooperation with LG CNS, is investing about 10 billion won to build cloud and big data infrastructure. It is also developing services that combine insurance and healthcare based on capital of about 100 billion won together with Hanwha General Insurance·Hanwha Life Insurance.
Recently, CHA Bio Group secured management control of Kakao Healthcare. Group affiliates Cha Cares and CHA AI Healthkare are investing a total of 80 billion won to secure about 43% equity in Kakao Healthcare, becoming the largest shareholder. Kakao, the former parent, will remain the second-largest shareholder with about 30% equity and continue their partnership.
Kakao Healthcare, which was spun off from Kakao in Mar. 2022, has its core business in the blood glucose management service "Pasta." It links a blood glucose meter with a blood glucose management app.
In the market, questions remain about how CHA Biotech will build a structure to generate revenue relative to its investments.
An industry official said, "Connecting R&D investment and business expansion to an actual cash-generating structure will be CEO Cha Won-tae's core task," adding, "Whether profitability can be raised through management efficiency under an Oner-led management system will be key."