Orion Group, famous for Choco Pie, is going all in on its bio business. It is investing in bio based on funds earned from confectionery to find future growth drivers. However, clear profits have yet to emerge.
Against this backdrop, Orion Group has reshuffled the management of its bio affiliates to strengthen the business. As Dam Seo-won, a third-generation family member and a vice president at Orion, is focusing on bio, some say the affiliates' performance will be a test of future management ability.
According to the business community on the 12th, Orion Biologics will hold a shareholders' meeting on the 26th to appoint Kwon Yong-su, Orion's new business Head of Team, as CEO. Until now, Kim Hyeong-seok, an executive director at Orion, had served as CEO of Orion Biologics, but with Kim stepping down, Kwon will newly take the helm. Kwon studied business administration at the University of Massachusetts Amherst and has worked at Orion for 20 years since 2006.
LigaChem Biosciences (LigaChem Biosciences), a core pillar among the bio affiliates, is also set for management changes. At its shareholders' meeting on the 31st, LigaChem Biosciences plans to appoint Kwon, the Head of Team, as an inside director. The board of LigaChem Biosciences also includes Vice President Dam Seo-won and Orion Group Vice Chairman Heo In-cheol as inside directors. A LigaChem Biosciences official said, "There is a vacancy among inside directors, and we plan to fill the seat."
Orion Group is targeting not only food but also bio as a future growth engine. Currently, Vice President Dam Seo-won, the eldest son of Orion Group Chairman Dam Cheol-gon, oversees Orion's Strategic Management Office. Under the Strategic Management Office is the New Business Team, which handles bio. The New Business Head of Team serves as CEO and inside director at bio affiliates and leads close-knit bio business decision-making within the group.
An Orion official said, "With the executive who oversaw Orion's new businesses, including bio, retiring, the Head of Team who had been handling the practical work will take over the post," adding, "We plan to push the business forward with continuity."
Although Orion Group has a strong confectionery image, it has actively invested in bio in recent years. In 2024, it invested 550 billion won in LigaChem Biosciences, a company developing antibody-drug conjugates (ADCs), becoming the largest shareholder. As of the end of the third quarter last year, Fan Orion, Orion Group's Hong Kong entity, holds 25.58% equity in LigaChem Biosciences. ADC is a technology that delivers drugs by attaching them to antibodies, often called a "guided missile that targets cancer cells."
However, results still fall short of expectations. LigaChem Biosciences' consolidated sales last year were 141.6 billion won, up 12% from a year earlier, but it posted an operating loss of 106.5 billion won. The deficit widened from the previous year (a 20.9 billion won loss). Transferring technology to companies such as Japan's Ono Pharmaceutical earned milestones that helped improve results, but rising research and development expenses led to a loss.
LigaChem Biosciences, founded in 2006 by CEO Kim Yong-ju, formerly of LG Chem, currently has 23 pipelines (drug candidates). Orion said, "Through our Boston subsidiary and others, we aim to secure in-house clinical capabilities and grow into a global biotech."
Another affiliate, Orion Biologics, has also not yet generated full-fledged revenue. The company is a joint venture established in 2022 with 60% equity from Orion Holdings and 40% from HysensBio. It aims to introduce functional toothpaste overseas that alleviates tooth sensitivity.
It has established a research lab in Korea and completed development of functional toothpaste for sensitive teeth and gums based on dental disease treatment technology. It won approval last year to sell a toothpaste for sensitive teeth in Thailand and Vietnam and plans to roll out functional toothpaste starting in Vietnam in the second half of this year. It also plans to expand into whitening toothpaste and children's toothpaste.
Separately, in 2021, Orion Holdings established Shandong Lukang Haoriyou with China's state-owned pharmaceutical corporations Shandong Lukang Pharmaceutical and is also pursuing a colorectal cancer in vitro diagnostic kit business in China. It is preparing for commercialization by building laboratories and production facilities for colorectal cancer in vitro diagnostics and conducting hospital clinical trials with patients.
A business community source said, "As the father succeeded in the confectionery business, the third generation faces the task of delivering results in the bio business." The industry is watching to see what results the bio business of the Choco Pie company will yield.