The Ministry of Health and Welfare will create a specialized fund worth 150 billion won to invest in phase 3 clinical trials for new drugs. The move aims to fill the funding gap in late-stage clinical development, which requires large-scale capital.
The ministry said that from the 11th to on the 5th of next month, for about four weeks, it will conduct a call to select managers for the phase 3 clinical trial specialized fund through Korea Venture Investment Corporation.
The fund totals 150 billion won. The government will contribute a total of 70 billion won, including 60 billion won from the budget and 10 billion won from recovered resources from existing funds, while IBK Industrial Bank and The Export-Import Bank of Korea will each invest 10 billion won, bringing public contributions to 90 billion won.
Targets for investment are corporations advancing phase 3 trials with innovative new drugs and biobetter pipelines. At least 60% of the fund aggregates must be invested in phase 3 corporations in the pharmaceutical and biotech sectors.
The government also decided to allow a first-close structure so that early investments can begin once at least 120 billion won—80% of the target fund size—is secured.
The fund's life is up to eight years. The hurdle rate is set at an internal rate of return (IRR) of 7% or higher.
The ministry expects the fund to help ease financing difficulties for domestic pharmaceutical and biotech corporations seeking to enter global markets after the clinical stage.
According to the ministry, there are currently 57 new drug pipelines in phase 3 trials in Korea. They include 34 small-molecule drugs and 20 biopharmaceuticals, with many focused on metabolic diseases, central nervous system disorders, and cancer therapies.