Ildong Pharmaceutical said on the 13th that its board of directors voted to merge and absorb Unovia, its new drug research and development (R&D) affiliate.
The merger will proceed as a small-scale merger without issuing new shares, and the merger ratio is 1 to 0. The record date for shareholders is Apr. 30, and the merger date is Jun. 16.
The company said it was a decision to enhance business competitiveness and secure operational stability amid growing uncertainty in the management environment.
Through this merger, the research and development function that had been operated as a separate corporation will be integrated into the headquarters to internalize R&D asset. Previously, Ildong Pharmaceutical secured topline data for Phase 1 clinical trial primary endpoints of a GLP-1RA obesity treatment candidate through Unovia, and the P-CAB class new drug "Padoprazan," a treatment for peptic ulcers, has entered Phase 3 clinical trials, among other results.
Ildong Pharmaceutical plans to use the merger as a springboard to accelerate licensing-out and commercialization of the pipeline. It also plans to revamp its group-level research and development strategy and strengthen inter-organizational collaboration to boost new drug development capabilities.
The company said the decision to merge and absorb was intended to respond to changes in the environment surrounding the pharmaceutical industry, including a revamp of the drug pricing system.
The government is pushing a policy shift to lower prices of generic drugs and invest the resulting savings in national health insurance finances into new drug R&D. Given that pricing pressure could shake pharmaceutical companies' profitability, the move is seen as reflecting an intent to integrate research and development organizations into the headquarters, rather than dispersing them, to improve management efficiency and responsiveness.
Some in the market also see an intent to respond preemptively to amendments to the Commercial Act. The Financial Services Commission plans by June this year to prepare revisions to exchange listing and disclosure rules and amendments to the Financial Investment Services and Capital Markets Act, centered on a "principled ban on dual listings." Dual listing refers to listing a key subsidiary on the stock market when the parent company is already listed.