Ybrain, a leading domestic electroceuticals company, is making a renewed push to list on KOSDAQ. The company, which halted its listing process in the past due to risks involving its largest shareholder, secured management stability last year when CERAGEM Co. became the largest shareholder. Its strategy is to raise corporate value by expanding its business from electroceuticals for depression treatment to dementia treatment and the brain-computer interface (BCI) field.
According to the industry on the 28th, Ybrain has recently begun in earnest to prepare for an initial public offering (IPO). The company selected NH Investment & Securities as its underwriter last year and began preparing for a KOSDAQ listing. It plans to pursue a technology evaluation in the first half of next year and review filing for a preliminary examination in the second half.
Ybrain is an electroceuticals development company founded in 2013 by engineers from the Korea Advanced Institute of Science and Technology (KAIST). Its flagship product is the depression-treatment electroceutical "MindStim." Users wear a headset-type device that delivers a microcurrent to the prefrontal cortex to help alleviate depression and stress. Nonreimbursed prescriptions began in 2023, and cumulative prescriptions have surpassed 200,000. The product is currently under U.S. Food and Drug Administration (FDA) review for approval.
The company previously received A·A grades in a technology evaluation in 2022 for a special-technology listing. However, as management uncertainty surfaced at then-largest shareholder Neofect, it abandoned its application for a preliminary review by the Korea Exchange (KRX).
CERAGEM Co. is behind this renewed listing bid. CERAGEM Co. further increased its stake in Ybrain last year, raising its equity share from 10.16% to 41.19%. In contrast, Neofect's stake fell to 8.83%. In the industry, the assessment is that listing conditions have significantly improved since CERAGEM Co. became the largest shareholder.
CERAGEM Co. is also pushing to transform itself from a massage chair company into a comprehensive healthcare company. It has designated Ybrain as a future growth engine and has steadily ramped up investment. Cumulative investment so far amounts to 30 billion won.
The two companies are also strengthening business collaboration. A prime example is the jointly developed depression treatment device "Mind Fit." Ybrain is also participating in CERAGEM Co.'s Healthcare Alliance launched in April this year. With some 70 corporations and institutions taking part, the council aims to build a Digital Healthcare ecosystem and realize an "artificial intelligence (AI) wellness home."
Still, earnings are cited as an issue to be addressed during the listing process. Ybrain has posted operating losses every year since 2022. Last year's operating loss was about 5.3 billion won, widening the deficit to a cumulative 20 billion won. Revenue has also fallen for three consecutive years. It shrank more than 30%, from about 5 billion won in 2023 to about 3.3 billion won last year.
The company plans to prove its growth potential through follow-up pipelines. It is currently developing electroceuticals to treat mild cognitive impairment and dementia. In particular, in mild dementia, it completed a confirmatory clinical trial for the first time in the industry and is now analyzing the data.
The farther horizon Ybrain envisions is the BCI field. BCI is a technology that converts brain waves into electrical signals to exchange information with a computer, implemented by reading a person's thoughts to move a cursor or control a robotic arm. It is well known as the technology under development by Neuralink, founded by Tesla CEO Elon Musk.
Ybrain is participating as the sole industry partner in the BCI field of the Ministry of Science and ICT's "K-Moonshot Project." Through this project, it plans to read a patient's movement intentions with a chip implanted in the brain and have AI analyze them to develop into an electric wheelchair or rehabilitation robot.
The recently launched Korea BCI Association is also expected to bolster business expansion. Hospital Director Baek Nam-jong of Seoul National University Hospital serves as the inaugural president, and Ybrain joined as a founding board company. CERAGEM Co. also joined as a member. With Seoul National University Hospital, Severance Hospital, Korea University Anam Hospital, KAIST, and Ulsan National Institute of Science and Technology (UNIST) participating, attention is focusing on the synergy of the two companies' collaboration in building the domestic BCI ecosystem going forward.
"Ybrain halted its listing process in the past despite passing the technology evaluation due to risks involving its largest shareholder, so what matters now is that governance stability has improved more than business feasibility," an industry official said. "However, since it continues to post losses, the key in the listing process will be how convincingly it can show the growth of the electroceuticals market and the commercialization potential of its follow-up pipelines."