The Public Growth Fund will provide a low-interest loan of 20 billion won to Kyongbo Pharmaceutical(214390), which is pushing to build a dedicated Antibody-Drug Conjugate (ADC) production facility. Beyond investing in ADC developers, it is also putting money into building production infrastructure, moving to expand the value chain of Korea's ADC industry.
According to the industry on the 31st, the Public Growth Fund's fund management committee approved funding for Kyongbo Pharmaceutical, located in South Chungcheong Province, on the 27th. Based on its experience producing active pharmaceutical ingredients and finished drugs, Kyongbo Pharmaceutical applied for a 20 billion won loan from the Advanced Strategic Industry Fund to newly enter the ADC business.
This support is the fourth investment case in the biotech sector by the Public Growth Fund. Previously, it provided 85 billion won to BTGEN in Apr., a low-interest loan of 300 billion won to SK bioscience(302440) in May, and directly invested 250 billion won in LigaChem Biosciences(141080) in Jun. It is the third low-interest loan to a biotech company and the second in the ADC field after LigaChem Biosciences.
Kyongbo Pharmaceutical is an affiliate of Chong Kun Dang pharmaceutical(185750) Group and a subsidiary of Chong Kun Dang Holdings. Based on long-standing experience producing anticancer drugs, it is pushing to enter the ADC business. To secure tailored antibodies, it is collaborating with external companies, while it also holds more than 10 proprietary technologies for drug and linker manufacturing and ADC conjugation.
Kyongbo Pharmaceutical plans to use the Public Growth Fund's support to build dedicated ADC production facilities. Through this, it aims to participate in the ADC industry value chain by providing services such as manufacturing clinical ADC samples and analyzing components.
The company is already investing in building production facilities for the ADC contract development and manufacturing organization (CDMO) business. According to a corrected disclosure in Feb., the investment amount for related facilities increased from 85.46 billion won to 96 billion won. Capacity expansions and design changes to improve productivity drove the increase.
The investment period runs from Aug. 14, 2024, to Dec. 31 this year. Kyongbo Pharmaceutical plans to complete its GMP production plant by the end of the year, finish plant validation and preparations for Good Manufacturing Practice (GMP) certification by the third quarter of next year, and produce clinical ADC samples.
In the early phase, the company plans to start with nonclinical and clinical ADC production and then expand into commercial production. It also set a strategy to secure competitiveness by providing an ADC development platform technology based on its in-house development of drugs and linkers.
Including this support for Kyongbo Pharmaceutical, the Public Growth Fund approved a total of 17.9 trillion won in support from January to Aug. this year. That is about 60% of its annual support target of 30 trillion won. Of this, approvals for low-interest loans totaled 6.59 trillion won, surpassing half of the annual target of 10 trillion won.