SK Holdings' SK Biopharm IPO in the works

SK Biopharm listing pursued on drug development

By Park Hyong-ki

SK Holdings may likely see returns on its investment in SK Biopharmaceuticals via an initial public offering (IPO) of the biotech venture firm at the end of this year or in 2019, industry sources said.

This would depend on SK Biopharmaceuticals’ two new drugs under development.

One is a drug for the treatment of sleep disorders, for which the bio firm submitted an application to the U.S. Food and Drug Administration (FDA) for commercial approval last month after it completed the third phase of a clinical trial.

The other one is a drug for the treatment of epilepsy, which is currently in the third phase of clinical testing for effectiveness and safety.

SK Holdings and SK Biopharmaceuticals said the new drug application (NDA) for the second drug could be submitted this year.

“The general IPO scenario would be drawn up based on the progress of these two key drugs under development. It could be toward the end of this year or next year,” an industry source said.

A spokesperson for SK Biopharmaceuticals said it normally takes at least 11 months to review the NDA. Since it was submitted in December last year, if all goes according to the plan, the company could gain FDA approval for the U.S. market in early 2019.

U.S.-based Jazz Pharmaceuticals, in partnership with SK Biopharmaceuticals, has the right to market the drug for sleep disorders in the world’s biggest economy. SK will receive royalties from Jazz for the sales.

This would certainly generate revenue for SK Biopharmaceuticals, which has had a negative balance sheet over the past decade since it was separated from SK Holdings in 2011.

SK Innovation launched a biotech division in 1993, and then the venture became part of SK Holdings in 2007 when the group reorganized into a holding company.

SK Holdings has been injecting capital into SK Biopharmaceuticals for drug research and development as part of new growth.

SK Holdings’ investor relations estimated the value of SK Biopharmaceuticals to reach 10 trillion won by 2020, a year after the drug for sleep disorders becomes commercially available, the source noted.

The biotech venture is “not yet at the stage of receiving proposals from brokerages” for the IPO, he added.

SK Biopharmaceuticals has also inked an agreement to set up a joint venture with Glycyx Therapeutics to further develop SK’s Relenopride compound for the treatment of rare neurological diseases.

“The joint venture is likely to be formed in the first half of this year in Britain,” its spokesperson said.

The compound is currently in the second phase of a clinical trial in the U.S.

It said in a press release that it will seek investors for the drug development following the establishment of the joint venture.