In the bio initial public offering (IPO) market, the trend of "separating the wheat from the chaff" is becoming clearer. As it has grown harder to win over investors with simple research and development (R&D) capabilities alone, funds are flowing to companies that have proven their commercial viability through actual technology transfer deals.
According to the investment industry on the 14th, the recent bio investment trend is being reorganized around visible results such as technology transfer. Observers say the key criterion determining corporate value is not the technology itself but "how much it has been validated in the market."
This shift is evident in recent listings. IMBiologics, a developer of autoimmune disease and antibody therapeutics, recorded a "four times" surge on its first day, with its share price quadrupling from the offer price. Kanaph Therapeutics, a developer of antibody-drug conjugate (ADC) immuno-oncology therapies, also more than doubled from its offer price. Both companies secured technology transfer results worth about 1 trillion won, drawing investor interest from the book-building stage.
There is also a continued trend of companies with technology transfer results making a second run at IPOs. Adel, a developer of Alzheimer's disease treatments, recently moved to try again based on a large technology transfer result.
Adel is a corporation founded in 2016 by Yoon Seung-yong, a professor in the Department of Brain Science at Asan Medical Center. The company is developing a therapy that targets only "acetylated tau"—which clumps, accumulates in the brain, and damages neurons—among tau proteins cited as a major cause of Alzheimer's disease, while leaving normal tau untouched.
The company received BBB and BBB in a technology evaluation last Oct., failing to meet listing standards. For a technology special listing, it must receive at least one A or higher. At the time, the exchange was said to have acknowledged the originality of the technology but pointed out business viability limits due to a lack of technology transfer results.
But the situation changed rapidly right after the evaluation. Adel succeeded in transferring its Alzheimer's drug candidate "ADEL-Y01" to France's Sanofi in a deal worth a total of $1.04 billion (1.53 trillion won). The nonrefundable upfront alone came to $80 million (about 118 billion won), recording a high upfront ratio (7.7%) even among last year's domestic pharma-bio technology transfer contracts. Even after sharing revenue with its co-developer Oscotec, the company will secure about 62.5 billion won in cash.
The company plans to reapply for a technology evaluation this month, six months after the previous review, and to file a preliminary screening with the exchange within the first half.
Novelty Nobility, a developer of antibody new drugs, shows a similar pattern. Founded in 2018 by Park Sang-kyu, a professor at Ajou University's College of Pharmacy, the company filed for a preliminary review for a technology special listing in Jan. last year, but voluntarily withdrew the review in June of the same year after a transferred autoimmune disease treatment candidate was returned.
The substance was transferred to U.S.-based ValenzaBio in 2022 in a deal worth 880 billion won, and it secured A and A grades in the technology evaluation, raising IPO expectations. However, the contract wobbled during a merger and acquisition (M&A) process and was returned, derailing the listing plan. When even the plan to acquire furniture maker KOAS fell through due to investor opposition, the company shifted to an independent listing strategy.
Novelty Nobility has since prepared for a rebound by shoring up research and development results. Recently, key figures have also been gathering at the company. In Feb., Kang Yoon-koo, formerly head of strategy at ToolGen, joined as chief financial officer (CFO), and Baek Seung-jae, who had been chief medical officer (CMO) at Hanmi Pharmaceutical, took charge of clinical development. The company also brought in Park Chan-hee, who led new drug development at JW Pharmaceutical, as chief science officer (CSO) and executive vice president, while he continues as chief technology officer (CTO).
Novelty Nobility plans to pursue a retransfer of the previously returned candidate "NN2802." Based on a phase 1a trial completed in the United States, it aims to continue development from phase 1b to again raise the possibility of technology transfer.
A company representative said, "At the time, the return was not due to our technological capability, but a strategic decision by the partner to focus on substances closer to commercialization." The company is in talks with multiple corporations, aiming to sign a new technology transfer contract within the year.
Along with pushing for a re-technology transfer of the returned "NN2802," the ADC candidate "NN3201," which targets the gene (c-Kit) that regulates cell division, is also being considered as a key technology transfer candidate. Observers say the success or failure of this renewed IPO attempt ultimately hinges on whether the company secures technology transfer results.
Industry watchers say the bio IPO market has already been reorganized around "performance." An industry official said, "Now, technological prowess alone is not enough; only corporations verified through actual contracts are recognized in the market," adding, "Technology transfer results have become the key variable for IPO success."