SK Biopharma prices IPO at $40 high end, raising $794 mn

2020.06.19 11:00:01 | 2020.06.19 17:47:42

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SK Biopharmaceuticals Co. on Friday raised 959.3 billion won ($793.8 million) after pricing its initial public offering at 49,000 won, the highest end of its desired range.

The drugmaking unit of the South Korean conglomerate closed the books on the institutional portion of the sale Thursday. The offering drew 1,076 institutional investors from home and abroad, with orders oversubscribed by more than 835 times their allotted shares.

Public subscription is scheduled for June 23-24. Shares will begin trading on July 2.

The lead bookrunners are NH Investment & Securities Co. and Citigroup Global Markets Korea Securities Ltd. Joint underwriters are Korea Investment & Securities Co. and Morgan Stanley.

SK Biopharmaceuticals allocated 60 percent of its total 19,578,310 shares to be issued to institutional investors. The pricing would give it a market valuation of 3.84 trillion won, which would be the largest public issue since the Kosdaq listing of Celltrion Healthcare Co. in 2017.

The institutional tranche of Samsung Biologics Co., which debuted in 2016, had been oversubscribed by 296 times and Celltrion Healthcare by 38 times.

Analysts expect SK Biopharmaceuticals to safely land in the top 50 on the main Kospi. They also estimate its share price to reach at least 70,000 won within two months of the listing. With the 49,000 won pricing, the company would also make it into the Kospi 200 index, a basket of the top 200 stocks on the Korea Exchange, which would further buoy its market standing.

“SK Biopharmaceuticals’ share price is projected to nearly double in the short term,” said Choi Nam-gon, researcher at Yuanta Securities. “Its long-term outlook is also promising as it is the first Korean biopharma firm to independently win approval from the U.S. Food and Drug Administration.”

SK Biopharmaceuticals launched its anti-epileptic drug cenobamate (Xcopri) in the United States in May, the first Korean med to independently gain an FDA nod without partnering or licensing out.

Shares of SK Holdings Co., the holding entity of SK Group, are also on a bullish run. They are now trading at about 300,000 won after sinking to as low as 102,500 won in March. On Friday, they fell 5.02 percent to close the day at 293,000 won.

SK Biopharmaceuticals’ IPO has refueled the K-bio frenzy. SCM Lifescience Co., after some early setbacks, went public on Wednesday backed by overwhelming demand, drawing 815 times more retail subscriptions than planned. Its shares on Friday closed at 30,700 won, 4 percent higher than its initial price of 29,500 won.

By Kang Woo-seok, Park Jae-young and Kim Hyo-jin

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