South Korea’s first biopharmaceutical unicorn company Aprogen Inc. is merging with its Kospi-listed affiliate Aprogen Medicines Inc. to directly go public on the Kospi in August, a move that is expected to help improve financial health and streamline the management decision process for better efficiency.

Aprogen and its affiliate Aprogen Medicines on Tuesday got the nod for their merger from shareholders during separate extraordinary shareholders’ meetings. Under the deal, non-listed Aprogen will be merged into Kospi-listed Aprogen Medicines in a share exchange ratio of 1:10.009, meaning Aprogen shareholder with 1 share will get 10.009 shares of Aprogen Medicines.

The two affiliates aim to complete the merger process by July 15, and the new shares will be listed on August 5. The newly united company will be renamed as Aprogen.

Shares of Aprogen Medicines traded down 2.86 percent at 1,865 won ($1.44) during Wednesday morning trade.

Aprogen will become a Kospi-listed company with 540 billion won ($418 million) in assets and 700 professionals in the bio sector. All executives of Aprogen were also approved to retain their positions in the newly merged entity on Tuesday.

The company expects the union would help it improve its financial health and efficiency in management with streamlined ownership structure.

“The merger has also turned Aprogen Biologics into the newly united company’s fully owned subsidiary, a move that is expected to speed up technology collaboration and decision-making process in development and production of antibody and bio medicines,” said Lee Seung-ho who was newly appointed as CEO of the new entity. Lee joined current Aprogen as CEO in August 2021 from the investment banking industry.

Aprogen Biologics focuses on novel biologics and biosimilars production. Its Osong plant, constructed in April 2018, has the world’s fifth-largest production facility and has an annual Active Pharmaceutical Ingredient (API) production capacity of more than 3,000 kg.

The five biosimilars in its pipeline are Remicade for autoimmune disease, Herceptin for breast cancer, Rituxan for lymphoma, Humira for autoimmune disease, and Avastin for colorectal cancer. The novel biologics that the company is developing are treatments for degenerative arthritis, lymphoma, acute leukemia, triple-negative breast cancer, and colorectal cancer.

After the merger, Kim Jae-seob, the former CEO of Aprogen Medicines, will lead the company’s R&D. Kim holds a 100 percent stake in G-Baise, the holding company of Aprogen Group and the largest shareholder of Aprogen.

By Yoo Joo-yeon and Susan Lee

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