Sillajen Inc., a rising star among unlisted Korean biotech companies preparing to go public on the secondary Kosdaq market early December, plans to use proceeds from initial public offering to fund the ongoing clinical trial of its investigational liver cancer drug Pexa-Vec and the development of the future pipeline of renal and colorectal cancer drugs.

The company is hoping to raise 100 billion won ($85.6 million) from the public offering of 10 million shares at a desired price band of 15,000 won and 18,000 won apiece, said Sillajen’s chief executive Moon Eun-sang during a recent interview with the Maeil Business Newspaper.

Public subscription is due to be held on Nov. 28-29 after a book-building session for institutional investors. Its lead IPO manager is NH Investment & Securities.

Sillajen, whose over-the-counter value is estimated at 1 trillion won, was established in 2006. The biotech company is focusing on development cancer drugs using anti-cancer viruses. The investigational liver cancer drug Pexa-Vec, first of its kind in Korea, was granted by the U.S. Food and Drug Safety to conduct a phase III study in April last year. The ongoing study enrolled 39 patients in Korea and four other countries globally. The phase III study was approved in 11 countries including the U.S. and Canada.

Pexa-Vec kills cancer cells using the body’s immune system after the patient’s cancer cells are infected with gene-manipulated vaccinia virus. Pexa-Vec infects cancer cells first, and then the patient’s immune system recognizes the infected cancer cells as foreign bodies and attacks them. Pexa-Vec is expected to be commercialized after the clinical trial is completed sometime in 2019.

Moon, a dentist-turned-entrepreneur, is certain about the success of Pexa-Vec. “The treatment has support from physicians, and the FDA indicated that it would license marketing upon the positive clinical result. We have many experienced staff working at our U.S. subsidiary. The odds of a failure are low.” He said. “I am sure this will be blockbuster,” he added.

When Pexa-Vec’s commercialization program goes on track, Sillajen will swing to the black in 2020, Moon said. "It’s hard to project when it will be, but if we succeed in the clinical trial, we will no doubt be in the black. We also plan to conduct clinical trials for Pexa-Vec in combination with other cancer drugs in patients with various solid tumors, and this makes us expect license deals to be added in the new pipeline.”

Sillajen has remained in the red for many years, and it posted an operating loss of 23.8 billion won over sales of 1.8 billion won last year. But the company’s technology is highly regarded, leading to the attraction of more than 50 billion won in the pre-IPO deal so far this year. Moon graduated from Seoul National University’s School of Dentistry and First Moscow State Medical University and worked as a doctor before taking over as CEO of Sillajen in February 2014.

By Song Gwang-sup

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