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Biz News Korea(Eng)

Appetite for Korean biotech stocks strong despite Hanmi Pharm upset

Collected: 2016.10.27

Distributed: 2016.10.28

Source: Go Direct

Korea’s pharmaceutical and biotechnology sector continues to draw in capital despite the setback with the industry’s darling Hanmi Pharmaceutical under probe by authorities for insider and disclosure violations following cancellation of a mega out-licensing deal.

According to Mirae Asset Daewoo Securities on Monday, Korean biotech and pharmaceutical companies raised a total of 1.4 trillion won ($1.23 billion) by selling new shares or going public during the first nine months of this year, already exceeding what they raised for full 2015.

JW Life Science Co. due to list on Thursday attracted 1.58 trillion won in its public offering. It was oversubscribed by 220 times, making many of the institutional and retail investors go home empty-handed.

There had been concerns for disillusionment and dampened appetite for bio and drug makers after the upset with Hanmi. But funds with little options for investment in low-interest environment still believe bio and drug sector a promising bet.

Viromed Co. also raised 139.2 billion won last week by selling new shares amid overwhelming response.

Funds are turning to the unlisted companies in search for high-yield long-term investments. According to Korean Venture Capital Association data, venture capital investments in the biotech sector reached 317 billion won last year, the highest level since 2002. The figure reached 194.5 billion won, and the full-year amount is expected to beat last year’s level.

By Kim Hye-soon

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