As public opinion on animal welfare spreads worldwide, WOOJUNG BIO, which has walked a single path in nonclinical services for 37 years, faces a double bind of an "ethical wall" and "scientific limits."
That is because not only are the ethical issues of animal testing coming to the fore, but even if animal tests succeed, there is no guarantee of success in human trials.
In response, WOOJUNG BIO is throwing down a gauntlet with "organ on a chip," which implements human organs on a chip, signaling a shift in the bio industry's landscape.
◇Kolmar Group acquisition, 64% of voting equity 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. It began by selling laboratory mice to pharmaceutical companies and went on to provide nonclinical animal testing services. It expanded into 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 in on the last month. Moon Byeong-seok, head of the technology research institute at Kolmar Holdings, became CEO of WOOJUNG BIO in early this month.
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 with 47.22% equity in WOOJUNG BIO. The number of shares 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. Her 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 shareholder group and related parties hold 33.61% equity.
The founder's family decided to delegate their voting rights to Kolmar Holdings. If the CBs are converted, the founder family's equity, including former CEO Cheon Hee-jeong, will be diluted from 33.61% to 17.51%.
In that case, Kolmar Holdings will hold a total of 64.73% of voting shares by adding the equity secured through the convertible bonds (47.22%) to the founder family's equity (17.51%).
◇Step-by-step phaseout of animal testing overseas… WOOJUNG BIO's survival strategy
As the world reduces animal testing, WOOJUNG BIO's performance is also plunging. WOOJUNG BIO's consolidation revenue last year was 37.6 billion won, down 13% from the previous year. The operating loss turned to a deficit at 3.9 billion won.
In the past, when developing new drugs, the effectiveness was evaluated by repeatedly administering drugs to animals' eyes or skin. Various animals such as mice, pigs, and monkeys were mobilized in this process. The industry estimates that 200 million animals are sacrificed in experiments worldwide every year.
But because animals have different physiological structures from humans, there are many cases where, even if animal tests succeed, clinical trials in humans fail. The U.S. Food and Drug Administration (FDA) also last year 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 cells, into a three-dimensional structure similar to an organ.
Amid this trend, WOOJUNG BIO is jointly developing the so-called "organ on a chip" with U.S. corporations Xcellra Biosystems. It is preparing to introduce in Korea a service that can evaluate liver toxicity based on organ on a chip. To that end, it plans to hold a demo day on the 24th, invite industry officials, and showcase 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 says that if the nonclinical research infrastructure held by WOOJUNG BIO is used in the new drug development process, an integrated system from early research to commercialization can be established.
A Kolmar Holdings official said, "We are reviewing developing WOOJUNG BIO's organ on a chip technology in multiple directions together with Next&Bio's Organoid," adding, "In Korea, animal testing has not yet been 100% abolished in the process of pharmaceutical development, so some of that infrastructure can also be used."