LigaChem Biosciences disclosed on the 26th that it will raise funds for new drug research and development (R&D) by issuing a total of 500 billion won in a paid-in capital increase and convertible bonds (CB).
According to the filing, the company will issue convertible preferred shares (CPS) through a third-party allotment to raise about 330 billion won (329.999739 billion won) and issue the sixth unsecured private convertible bonds (CB) to raise 170 billion won.
All of the funds will be used as operating capital and are slated to be invested in next-generation new drug research and development (R&D), including Antibody-Drug Conjugate (ADC) and immuno-oncology therapies.
A total of 2,213,13 convertible preferred shares will be issued at 149,300 won per share. This is 3.46% higher than the reference price (144,309 won) on the day before the board resolution. The initial conversion price of the convertible bonds was also set at 149,300 won per share.
Korea Development Bank (KDB) and PAN ORION Corp. Limited, an investment entity of Orion Holdings, will participate in this funding.
Korea Development Bank (KDB) will invest a total of 250 billion won. It will acquire about 165 billion won in convertible preferred shares and 85 billion won in convertible bonds.
PAN ORION Corp. Limited will invest a total of 125 billion won. It will acquire 82.5 billion won in convertible preferred shares and 42.5 billion won in convertible bonds, respectively.
A third financial investor is also set to invest a total of 125 billion won, and the company plans to disclose the investor through a revised filing after it is finalized.
For both the convertible preferred shares and the convertible bonds, the conversion price may be adjusted to as low as 119,500 won, which is 80% of the initial price, depending on market price fluctuations. However, a refixing clause was also included to readjust the conversion price upward, up to the initial conversion price of 149,300 won, if the share price rises thereafter.
The company may exercise a call option on up to 10% of the issued amount between 24 months and 48 months after issuance. The exercise price is the amount plus an annual compound rate of 1.0%.
To reduce overhang concerns, the convertible preferred shares will be subject to a one-year lock-up from the date of stock certificate delivery, and the convertible bonds will also be restricted from conversion and face-value partitioning for one year from the issuance date.
The company plans to invest the secured 500 billion won in stages in new drug research and development starting in 2026. The annual execution size is 90 billion won in 2026, 180 billion won in 2027, and 230 billion won from 2028 onward.
LigaChem Biosciences is a company specializing in ADC development founded in 2006 by Kim Yong-ju. ADC is a therapeutic technology that precisely delivers a drug to cancer cells by attaching the drug to an antibody that binds to cancer cells. It is called a guided missile that targets only cancer cells.
LigaChem developed in-house the technology "ConjuALL," which can precisely attach a drug to a specific site on an antibody, and signed technology transfer agreements with Janssen, a subsidiary of Johnson & Johnson (J&J) in the United States, and Japan's Ono Pharmaceutical. The company is pushing to develop next-generation anti-cancer platforms such as immune modulating antibody-drug immune conjugate (AIC), as well as ADC.