As S.Biomedics, a developer of stem cell therapies, moves to raise funds for the second time since listing on KOSDAQ, strategic partner Dongkook Pharmaceutical is joining again, drawing market attention to the two companies' collaboration.
According to the pharmaceutical and biotech industry on the 17th, Dongkook Pharmaceutical will invest 5 billion won in this S.Biomedics fundraising as a lead investor. With Dongkook Pharmaceutical, which has collaborated since S.Biomedics was unlisted, injecting capital again, observers said the relationship has been reaffirmed as a long-term business partnership beyond a simple financial investment.
S.Biomedics plans to raise a total of 40 billion won by issuing 17.8 billion won in convertible preferred shares (CPS) and 22.2 billion won in convertible bonds (CB). The secured funds will be used for clinical development in Korea and the United States. In particular, the core focus is developing a Parkinson's disease stem cell therapy that is approaching phase 3 in the United States.
The partnership between the two companies began in 2018 with a 2 billion won cell therapy business contract. At the time, Dongkook Pharmaceutical secured the domestic rights to "FECS-Ad," a therapy S.Biomedics is developing for critical limb ischemia.
Since then, Dongkook Pharmaceutical has also strengthened ties as an investor. It invested about 1.5 billion won in a 7 billion won third-party allotment capital increase carried out in 2024, continuing the collaboration.
Dongkook Pharmaceutical's strategy is to expand its bio business by entering the cell therapy market beyond over-the-counter drugs and cosmetics. A company official said, "Dongkook Pharmaceutical has maintained a close partnership with S.Biomedics since 2018 and is currently reviewing a variety of collaborative models, including the pipeline."
This collaboration is feeding into S.Biomedics' pipeline development. The company is developing seven stem cell therapies, including for Parkinson's disease, critical limb ischemia, and spinal cord injury, with the Parkinson's program the most advanced. It is about to enter phase 3 trials in the United States and needs substantial funding.
Founded in 2004, S.Biomedics has expanded its pipeline based on a core technology (TED) that differentiates embryonic stem cells and a platform (FECS) developed to overcome the limitations of conventional cell therapies that inject cells in a single state. It listed on the KOSDAQ market in May 2023, and Kim Dong-uk, a professor in the Department of Physiology at Yonsei University College of Medicine and a leading authority in Korea's stem cell therapy field, serves as chief technology officer (CTO) and co-CEO.
Since the listing, the company has invested about 19 billion won in research and development (R&D) over about three years. However, as it plans to submit a large-scale phase 3 investigational new drug (IND) application to the U.S. Food and Drug Administration (FDA) within the year, it is expected to incur considerable costs until commercialization. It is also building a local finished drug manufacturing system in cooperation with U.S. contract development and manufacturing organization (CDMO) Catalent.
In June, it is set to announce key 24-month follow-up data from the domestic phase 1/2a trial. Alongside efforts to out-license overseas, it aims for commercialization in Korea in 2030.
Currently, the company's cash generator is its beauty business through its subsidiary EsthePharm, established in 2016. EsthePharm manufactures and sells stem cell culture fluid-based cosmetics and hyaluronic acid (HA) fillers, among others, and has launched a total of seven aesthetic and plastic surgery products to date. It accounted for more than 99% of S.Biomedics' total sales last year.
However, financial burdens continue due to aggressive research and development investment and expenses associated with entering late-stage clinical trials. S.Biomedics posted an operating loss of 8.2 billion won last year, up 53.2% from the previous year.
Some pipeline adjustments were also made. Although the acne scar treatment "CureSkin" received conditional approval for sale, the company voluntarily withdrew the product license and ended phase 3 early, judging that market demand was lower than expected.
The industry is noting that Dongkook Pharmaceutical has repeatedly injected capital as S.Biomedics approaches large-scale clinical entry.
An industry official said, "Dongkook Pharmaceutical is a strategic partner that goes beyond a simple financial investor, extending from early technology collaboration to rights acquisition and investment," adding, "Given the potential synergy with Dongkook Pharmaceutical, which has strengths in the beauty business based on pipelines such as improving eye wrinkles, this could lead to joint commercialization or additional pipeline collaboration in the future."