BDI Co., South Korean manufacturer of power generation facilities, said on Monday that it will buy 51 percent stake in U.S. novel drug developer as it moves to engage in new bio industry widely considered as a new growth engine.

In a regulatory filing on Monday, BDI said that it has signed an agreement to buy 51 percent stake in U.S. anti-cancer novel drug developer Eleison Pharmaceuticals LLC for 25 billion won ($20.9 million). The expected date of acquisition is August 3.

Shares of BDI in secondary Kosdaq closed Monday 11.11 percent down at 13,600 won in Seoul.

Eleison Pharmaceuticals is a bio company based in New Jersey, the United States, which has four anti-cancer novel drugs in pipeline. It is currently engaged in third phase clinical trial of its second pancreatic cancer treatment with U.S. Food and Drug Administration (FDA). It is also carrying out second phase trial with FDA for treatments for lung cancer, pediatric osteosarcoma, and brain cancer.

The company’s secondary pancreatic cancer treatment Glufosfamide has been designated as orphan drug in the U.S. and Europe and has acquired FDA’s special clinical planning evaluation approval, allowing research support for phase 3 clinical trial. The novel drug has also been designated as being subject to fast track procedure, allowing sale approval in 2022.

An unnamed official from BDI said that its investment will go to development of novel drugs, which is expected to maximize investment efficiency and allow win-win of both investor and developer. BDI plans to acquire additional entities with novel drug candidates in third phase clinical trial with high potential to rapidly expand new drug pipeline in final stage.

According to a report released by a bio-exclusive evaluator, the value of four pipeline owned by Eleison Pharmaceuticals is worth 600 billion won based on risk-adjusted net current value method.

BDI, meanwhile, convened an ad-hoc shareholder meeting in June and added bio industry as its new business. The company also appointed Edwin Thomas, chief executive of Eleison Pharmaceuticals as internal director. It also newly appointed Chairman Kim Il-kang as chief executive in a move to aggressively move into the new business sector. Kim has been behind company’s long-time efforts to bring in bio into its business.

The BDI official said that the company has already completed a mid- to long-term roadmap of its bio business and that it will focus capacity to develop the company into a global big pharmaceutical player.

By Lee Eun-joo

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