BlackRock, the world's largest asset manager, has been snapping up shares of Korea's bio corporations in quick succession. Following HLB(028300), it has aggressively increased its equity in Alteogen(196170) and Yuhan(000100), prompting analysis that this is more than simple bargain hunting and reflects a high assessment of the growth potential of Korea's pharmaceutical and biotech industry.
According to the industry on the 12th, BlackRock Fund Advisors, which manages BlackRock's funds, and its special affiliates bought 745,717 shares of Yuhan on the market through the 31st of last month. As a result, BlackRock's Yuhan holdings increased from 4,039,408 shares to 4,785,125 shares. Its equity stake also rose 1.43 percentage points, from 5.07% to 6.50%. This follows a move in June to raise its stake from 4.36% to 5.07%, expanding its investment weight for the second consecutive month.
Yuhan is expected to see improved profitability as global sales of the lung cancer drug "Leclaza (ingredient name Lazertinib)" expand. As Leclaza's global sales increase, revenue from milestone payments and royalties tied to sales is also projected to grow.
BlackRock has also expanded its investment in Alteogen. On the 31st of last month, it bought an additional 24,273 shares of Alteogen, raising its equity stake from 4.98% to 5.03%.
Alteogen's core technology is the hyaluronidase platform "ALT-B4," which converts intravenous (IV) formulations into subcutaneous (SC) formulations.
In January, it signed a 420 billion won deal with Tesaro Inc., a subsidiary of GSK plc in the United Kingdom, and in March it signed an 867.5 billion won deal with U.S.-based Biogen. Early this month, it also clinched a technology out-licensing deal worth around 500 billion won with a global pharmaceutical company, continuing its run of technology export results.
In particular, HLB is where BlackRock most aggressively increased its equity.
After raising its HLB equity stake to 5.01% in March, BlackRock expanded it to 6.05% in June to become the second-largest shareholder after Chair Jin Yang-gon, and by the end of last month it further increased its holding to 7.15%.
Notably, buying continued even after HLB received a third complete response letter (CRL) from the U.S. Food and Drug Administration (FDA) regarding the combination therapy of the liver cancer drug candidate "Rivoceranib" and "Camrelizumab" from China's Hengrui Medicine.
From the 10th to the 30th of last month, after HLB disclosed on the 9th that it had received a CRL, BlackRock acquired an additional 855,814 shares of HLB. Despite a sharp drop in HLB's share price due to the FDA approval delay, it increased its holding ratio.
In the market, some interpret this as BlackRock taking a positive view of HLB's chances for new drug approval and its long-term corporate value. However, BlackRock describes its purpose as "simple investment," making it difficult to confirm the specific investment background.
BlackRock's investment in Korea's biotech sector is not limited to individual corporations but is expanding across the board.
As of the end of June, BlackRock held equity stakes of 5% or more in 19 listed Korean companies, up by 12 from a year earlier. Of these, four are bio-related corporations, including LG Chem(051910). Since opening its Seoul office early this year, BlackRock has been expanding its points of contact for investment in domestic corporations.
The market is paying attention to the fact that global investors continue to increase their equity stakes even as Korea's bio stocks undergo a correction. The analysis is that, beyond simple bargain hunting, they highly rate the technological competitiveness and potential for global business expansion of Korea's bio corporations.
In fact, as Korea's pharmaceutical and biotech corporations have recently been clinching a series of technology exports, co-development deals, and partnerships with global drugmakers and expanding their presence overseas, observers say interest from foreign institutional investors is growing.
Seo Geun-hee, an analyst at Samsung Securities, said, "Foreign institutional investors analyze and invest in corporations from a mid- to long-term perspective rather than seeking short-term trading gains," and added, "Deciding to invest in domestic bio corporations regardless of current market conditions means they highly evaluate the overall growth potential of Korea's pharmaceutical and biotech industry."
Heo Hye-min, an analyst at Kiwoom Securities, said, "The mere fact that the largest overseas asset manager is increasing its touchpoints with domestic bio corporations is a positive signal that was rare in Korea's bio sector in the past," and added, "Recent successive technology export results and investor relations (IR) for overseas investors by those corporations appear to have had an impact."