As public opinion on animal welfare spreads worldwide, WOOJUNG BIO, which has walked a single path in nonclinical services for 37 years, has faced a double hardship of the "ethical wall" and "scientific limits."
That is because not only are the ethical problems of animal testing coming to the fore, but even if animal tests succeed, there is no guarantee of success in human clinical trials.
In response, WOOJUNG BIO is throwing down the gauntlet with an "organ on a chip" that implements human organs on a chip, signaling a shift in the landscape of the bio industry.
◇ Kolmar Group acquisition, 67% of voting shares secured
WOOJUNG BIO is a corporations founded in 1989 by the late CEO Cheon Byeong-nyeon, who graduated from Seoul National University College of Pharmacy. At the time, it began by selling laboratory mice to pharmaceutical companies and went on to provide nonclinical services for animal testing. It expanded its business to breeding facilities and equipment and infection control for research facilities.
After CEO Cheon passed away in May last year, the eldest daughter, former CEO Cheon Hee-jeong, took office. WOOJUNG BIO was acquired by Kolmar Holdings on the 24th. Moon Byeong-seok, head of the Kolmar Holdings Technology Research Institute, became CEO of WOOJUNG BIO in early Apr.
Kolmar Holdings secured management control by acquiring 35 billion won in convertible bonds (CB) issued by WOOJUNG BIO. If all are converted into shares, Kolmar Holdings will become the largest shareholder, holding 47.22% equity in WOOJUNG BIO. The number of shares to be issued upon conversion is about 15.05 million.
As of the end of last year, former CEO Cheon Hee-jeong holds 12.81% equity in WOOJUNG BIO. Former CEO Cheon Hee-jeong's younger sibling, Cheon Se-jeong, holds 12.73%, and their mother, So Gyeong-hee, holds 7.64%. The three together hold 33.18%. Including them and executives, the largest shareholders and related parties hold 33.61% equity.
The founding family decided to delegate their voting rights to Kolmar Holdings. When the CBs are converted, the founding family's equity, including former CEO Cheon Hee-jeong, will be diluted from 33.61% to 17.51%.
In that case, Kolmar Holdings will have a total of 64.73% of voting shares by adding the equity (47.22%) secured through the convertible bonds to the founding family's equity (17.51%).
◇ Step-by-step phaseout of animal testing overseas… what is WOOJUNG BIO's survival strategy?
As the world reduces animal testing, WOOJUNG BIO's performance is also plunging. WOOJUNG BIO's consolidated sales last year were 37.6 billion won, down 13% from a year earlier. The operating loss was 3.9 billion won, turning to a deficit.
In the past, when developing new drugs, the effects were evaluated by repeatedly administering drugs to the eyes or skin of animals. Various animals, including mice, pigs and monkeys, were mobilized in this process. The industry estimates that 200 million animals are sacrificed in animal testing worldwide each year.
However, because animals have different physiological structures from humans, there are many cases in which, even if animal tests succeed, clinical trials in humans fail. The U.S. Food and Drug Administration (FDA) last year also recommended phasing out animal testing and replacing it with organoids (mini organs), among others. Organoid refers to culturing stem cells, which grow into all human cell types, into a three-dimensional structure similar to an organ.
In this trend, WOOJUNG BIO is jointly developing the so-called "organ on a chip" with the U.S. corporations Axela Biosystems. It is preparing to introduce in Korea a service that can assess liver toxicity based on the organ on a chip. To that end, it plans to hold a demo day on the 24th and invite industry officials to present the technology.
WOOJUNG BIO's business is expected to link with Kolmar Holdings' drug development. Kolmar Holdings has Next&Bio, which operates an Organoid business, as an affiliate. HK inno.N, which has the gastroesophageal reflux disease treatment "K-CAB," is also an affiliate of Kolmar Holdings. The industry believes that if the nonclinical research infrastructure held by WOOJUNG BIO is used in the drug development process, an integrated system from early research to commercialization can be established.
A Kolmar Holdings official said, "We are reviewing developing in several directions the organ on a chip technology that WOOJUNG BIO is developing together with Next&Bio's Organoid," adding, "Since animal testing has not been 100% abolished yet in the domestic process of pharmaceutical development, this infrastructure can also be partially used."