Curacle, a corporations that develops treatments for intractable vascular diseases, is seeking a breakthrough by diversifying its business through entry into the veterinary drug market. It plans to widen its scope to early diagnosis for companion animals to secure a stable revenue base.
The company, which had been headed for designation as an administrative issue after continuing operating losses, cleared one hurdle when it acquired Daesung Pharmtech, an active pharmaceutical ingredient (API) specialist, in Jan. However, as clinical trials for an animal drug touted as a future cash cow have failed to pick up speed from the early stage, some say its mid- to long-term growth base is wobbling. Based on the Mar. 23 closing price (17,010 won), Curacle's market capitalization is about 372.9 billion won.
◇ Difficulty securing clinical patient dogs… will the approval timeline be pushed back
Curacle began a phase 3 domestic clinical trial in Jan. last year for CP01-R01, a treatment for chronic kidney disease in companion dogs. The method is to administer the candidate and a placebo orally for 12 weeks to 60 dogs to evaluate efficacy and safety.
Recruitment of patient dogs, however, has been slow. According to the company, it has recruited 24 so far and administered doses to 18 of them.
There are about 30 participating hospitals, but excluding those where the trial is not underway due to a lack of actual patient dogs, only about 20 are in operation. An additional six dogs are in screening, including urine tests, but observers say it will be difficult to complete patient-dog enrollment in the first half as the company planned.
The schedule for a new drug application (NDA), which had initially been targeted for within the year, could also be delayed. A company official said, "Chronic kidney disease has no clear symptoms in the early stage, so it takes time for guardians to recognize the illness."
The official added that to boost patient-dog recruitment, the company is running a campaign to raise awareness of renal disease in companion dogs, distributing urine test kits, and conducting home blood tests in parallel. When abnormal signs are found, the case is linked to detailed examinations at partner animal hospitals.
The company was guarded on the possibility of adjusting the approval timeline. On potential changes to the clinical design, it said, "We are focusing on strengthening patient-dog discovery within the existing framework," while adding, "Changes can be made as needed."
◇ They targeted a 100 trillion won market… but costs are rising as state support ends
If the trial is delayed, follow-up strategies will also be affected. Curacle had planned to expand the treatment target to companion cats and broaden indications to conditions such as degenerative brain diseases to secure sales in the companion animal market.
Veterinary drugs are considered highly scalable because regulations are relatively less strict than for human medicines, and if efficacy is proven in Korea, overseas expansion is also possible. According to the Korea Animal Health Products Association, the global market is expected to grow from 39 trillion won in 2021 to 103 trillion won in 2031.
Expense burden is also a variable. The candidate has been developed as a national research project, with the Companion Animal New Drug Development Group under the Korea Institute of Toxicology (KIT) providing expense support. However, since the project ended in Nov. 2024, Curacle has been bearing the expense on its own.
The company said, "The development expense is lower than for human medicines," while adding, "We are pursuing joint development with overseas partners."
The problem is Curacle's finances. Since listing, the company had relied on technology transfer revenue from CU06, a candidate for treating diabetic macular edema and wet age-related macular degeneration. But in 2024, partner Thea Open Innovation returned the global rights, effectively cutting off sales.
Last year's sales were 7.1 million won, down 99.5% from the previous year (1.6 billion won), and the operating loss increased more than 30% to 16.5 billion won. Loss from continuing projects before income taxes was 18.14645 billion won, and net loss was 17.8706 billion won, each up around 20%.
In the prior year, the company recognized part of the phase 2 expense settlement received from its partner Thea as sales, but after the rights return was finalized, it could not reflect this last year.
◇ They dodged delisting risk… but the revenue model remains a challenge
Curacle went public on KOSDAQ in Jul. 2021 via the technology exception track. The grace period for designation as an administrative issue runs through 2025. If it fails to achieve 3 billion won in sales this year, it could be designated as an administrative issue.
To avoid this, the company acquired Daesung Pharmtech. With Daesung Pharmtech's roughly 9 billion won in sales last year being reflected from this year, the company expects to meet the requirements to maintain its listing.
A company official said, "With the merger effect of Daesung Pharmtech reflected in consolidation results from the first quarter, we achieved sales that comfortably exceed the KOSDAQ listing maintenance criteria," adding, "We expect sales to gradually expand in the second half as we move into adjacent business areas such as basic chemical materials."
However, a stable revenue source has not yet been secured. Curacle is investing research and development expenses of up to 10 billion won annually across a total of 16 pipelines, so it needs a steady cash generator.
It is pursuing technology transfers for multiple pipelines within the year, but whether they will materialize is uncertain. CU01, a treatment for diabetic nephropathy that is the most advanced after completing a phase 2b trial, only resulted in a memorandum of understanding (MOU) for joint development with Boryung last year. The agreement has no legal force guaranteeing a technology transfer.
In response, the company is considering entering the companion animal diagnostics business. The plan is to build a value chain from diagnosis to treatment. At the regular shareholders meeting on the 26th, it plans to amend the articles of incorporation to add diagnostics to the business purpose.
The company said, "Based on our clinical experience with chronic kidney disease in companion animals, we are seeking synergies with early diagnosis solutions," adding, "Specific technologies or collaboration structures have not yet been finalized, but we are in talks with multiple domestic and overseas partners."
Analysts say this is also related to a plan at this shareholders meeting to double the issuance limits for convertible bonds (CB) and bonds with warrants (BW) from 100 billion won to 200 billion won, respectively. A company official said, "We do not yet have plans for additional mezzanine issuance, but will review flexibly depending on pipeline progress and funding needs."
The official added, "After issuing the first CB worth 20 billion won in Jun. 2023 to raise operating funds, we improved our financial structure through a shareholder-allotted paid-in capital increase (21.9 billion won) last year."