CHA Biotech aims to raise a total of 75 billion won ($62 million) through issuances of bonds with option to equity swap to strengthen contract development and manufacturing servicing for global gene therapy developers, the Korean stem cell research company said in a regulatory filing on Wednesday.

The new funds will be raised from 12 designated institutions by Friday through the issuance of 25 billion won of convertible bonds (CB) and 50 billion won of bonds with warrants (BW).

Of these, 50 billion won will go to its U.S. affiliate Matica Biotechnology as working capital for business growth and fund for GMP facility expansion. The remainder will be used to expand infrastructure for future CDMO business. CHA Biotech established Matica Biotechnology in the U.S. to produce viral vectors for cell gene therapies.

Viral vectors are essential materials for genetic manipulation in the development of cell gene therapies such as CAR-T cell-based therapies, which are called third-generation cancer drugs.

Demand for viral vectors is increasing as more pharmaceutical companies join the development of cell-based therapies.

CHA Biotech said it will expand its cooperation with multiple domestic and foreign cell gene therapy developers that want quick clinical development through its U.S. subsidiary.

CDMO is a comprehensive service that includes planning, development and mass production of pharmaceuticals required by ordering companies.

According to a report from Biotech Policy Research Center, CDMO and other life science service markets are expected to grow fast, topping 100 trillion won in combined sales in 2023 from about 50 trillion won in 2017.

By Kim Byung-ho and Minu Kim

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