HLB acquires controlling stake in top domestic enzyme producer

Drugmaker HLB will acquire a controlling stake in Genofocus, Korea’s top domestic enzyme producer, as part of the pharmaceutical company’s bid to expand its presence in the global market.

According to Genofocus’ regulatory filing, Monday, seven affiliates of HLB Group, including HLB Corp. and HLB Panagene, will jointly acquire a 26.48 percent stake in Genofocus at 80 billion won ($57.82 million).

For this, the affiliates will invest 25 billion won through a capital increase and other means, while a group of investors will spend 55 billion won to purchase Genofocus’ convertible bonds.

Following the investment, Genofocus, which supplies industrial enzymes to chip giant Taiwan Semiconductor Manufacturing Co. (TSMC) and other clients, will be able to secure 70 billion won of additional funds to improve its financial status.

“Genofocus possesses enzyme and precision fermentation technology essential for health supplements and microbiome-based drugs, and the acquisition will play a crucial role in our group’s long-term global expansion,” HLB Group Vice Chairman Im Chang-yoon said.

Genofocus is a Kosdaq-listed company established in 2000 by biotechnology expert Pan Jae-gu. The company is a key player in producing lactase, an enzyme critical for creating galactooligosaccharides, which serve as immune boosters and prebiotics. Globally, only two companies, including Genofocus, own such technology, helping the company form partnerships with major international brands in the dairy and health supplement markets.

Genofocus also produces catalase, an enzyme essential for breaking down hydrogen peroxide into water and oxygen after its use in the semiconductor etching and cleaning processes.

Genofocus has maintained profitability in its enzyme business but faced liquidity challenges after investing 35 billion won over the past six years in developing new microbiome and enzyme drugs.

HLB said the acquisition provides momentum for its expansions into "bio-healthcare" materials and creates synergies in the functional food and cosmetics sectors.

"Under the goal of becoming a global bio-healthcare leader, HLB is rapidly expanding into areas like drug development and bio-healthcare materials,” Im said. “We expect that recent new acquisitions will generate substantial synergies.”