Ildong Pharmaceutical said on the 13th that its board of directors voted to absorb and merge 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 strengthen business competitiveness and secure operational stability amid growing uncertainty in the business environment.
Through this merger, the research and development function, which had been operated as a separate corporation, will be integrated into the headquarters to internalize R&D asset. Previously, Ildong Pharmaceutical, through Unovia, secured topline data for Phase 1 clinical trial primary endpoints of a GLP-1RA obesity treatment candidate, and the P-CAB class new drug "Padoprazan" for peptic ulcer has entered Phase 3, among other results.
Ildong Pharmaceutical plans to use the merger as a springboard to speed up technology export (license-out) and commercialization of the pipeline. In addition, the company will overhaul group-level research and development strategy and strengthen inter-organizational collaboration systems to enhance new drug development capabilities.
The company explained that the background of the absorption-type merger decision was to respond to environmental changes surrounding the pharmaceutical industry, such as drug pricing system reforms.
The government is pushing a policy shift to lower prices of generics and invest the resulting savings in the National Health Insurance budget into new drug R&D. As profitability at pharmaceutical companies could be shaken by drug price cut pressures, the view is that the decision reflects an intent to integrate research and development organizations into the headquarters rather than dispersing them, in order to improve managerial efficiency and responsiveness.
Some in the market also view the move as a preemptive response to proposed 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 "principally banning dual listings." Dual listing refers to listing a key subsidiary on the stock market when the parent company is already listed.