Genome & Company, long noted as a frontrunner in developing microbiome (gut microbe) drugs, has exited its existing business and shifted strategy to focus on cosmetics and antibody-drug conjugates (ADCs). Although it is accelerating restructuring through successive fundraisings, whether it secures technology transfer results is emerging as the key variable for a rebound amid continued weak performance.
According to the biotech industry on the 7th, Genome & Company recently secured 7 billion won through a third-party allotment paid-in capital increase. The funds will be invested in expanding the cosmetics business and taking its own brand "UIQ" global. The company plans to strengthen its push into overseas markets including the United States, Japan, China, and Indonesia to secure stable cash flow.
◇Exiting microbiome and shifting business…"Cosmetics·ADC" two-track
Founded in 2015, Genome & Company drew significant attention by entering clinical trials for a microbiome immuno-oncology therapy for the first time in Korea and listed on KOSDAQ in 2020.
However, after a domestic phase 2 trial combining its core pipeline, the anticancer microbiome therapeutic candidate "GEN-001," with Merck and Pfizer's immunotherapy "Bavencio (avelumab)," it decided not to proceed to phase 3, effectively halting development.
This strategy revision is seen as stemming from structural limits in microbiome drug development. Because the mechanisms of interaction between microbes and human diseases are complex, predicting clinical success is difficult, and commercialization cases are limited. In fact, domestic corporations such as CJ Bioscience and KoBioLabs have been posting long-running losses.
Accordingly, the company chose a "two-track strategy" of securing cash flow through the cosmetics business and focusing new drug development on ADCs. The idea is to build a revenue base with cosmetics, which commercialize relatively quickly, and use it to continue new drug development.
To execute this strategy, the company is also speeding up fundraising. Last month, it issued convertible bonds (CBs) and convertible preferred shares (CPSs) to secure about 30 billion won, which will be invested in developing ADCs for new targets.
This is not Genome & Company's first fundraising. In 2023, it issued 23 billion won in privately placed CBs for the stated purpose of developing a Microbiome Therapeutic.
Then, in Apr. 2025, it secured additional funds by issuing a total of 54.1 billion won in perpetual CBs and CPSs to shareholders of its U.S. microbiome contract development and manufacturing (CDMO) subsidiary, List Biotherapeutics. At the time, the company planned to use the funds for new anticancer drug development and microbiome commercialization.
After having invested hundreds of billions of won in its past microbiome business, it has recently injected additional capital into new businesses such as ADCs, signaling a shift in the investment center of gravity.
◇Fighting for technology transfer amid worsening results…performance hinges on CB repayment timeline
The company is using its genomics analysis-based platform "GNOCLE" to discover candidates and is building pipelines such as "GENA-104 ADC" and "GENA-120." In particular, it aims to pursue technology transfer at the preclinical stage to reduce the burden of clinical research and development while generating revenue.
To date, Genome & Company has completed three technology transfers. It transferred "GEN-001" to LG Chem in Dec. 2019; transferred the ADC antibody "GENA-111" to Switzerland's Debiopharm in May 2024 in a deal worth a total of 586 billion won; and in Feb. 2025 signed a technology transfer agreement for "GENA-104" with the United Kingdom's Ellipses Pharma.
Still, improving results remains a task. 2024 sales were 27.75 billion won, up 94.1% from a year earlier, but then turned downward, and operating loss widened from 24.2 billion won to 29.2 billion won.
There is also criticism that the technology transfer strategy diverges from short-term results. Because deals are pursued at the preclinical stage, aside from the upfront payment, milestone payments are structured to be paid according to clinical entry and development progress, making it difficult to translate into revenue in the short term.
On top of that, when LG Chem halted development of GEN-001 in Nov. 2025, citing efficacy and growth limits of microbiome anticancer drugs, questions were raised about the sustainability of that technology transfer outcome.
In the end, analysts say whether results rebound will depend on clinching additional technology transfer deals. The company said it is in talks with global corporations regarding two ADC pipelines (GENA-104 ADC·120), but did not disclose specific counterparties or timelines.
The market sees that if visible technology transfer results are not secured before the CB put-option window arrives, funding pressures could resurface.
An industry official said, "Shifting the business portfolio itself is an unavoidable choice, but to improve results in the short term, technology transfer results need to become visible," adding, "In particular, if a meaningful deal is not secured before the CB repayment point, financial burdens could grow."