Korean bio ventures capitalize on cheap stock prices for hereditary succession

2022.07.28 14:59:13 | 2022.07.28 15:44:37

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Owners of South Korean biotech companies have been making the most of the bearish market to facilitate hereditary succession and spread out the tax burden.

The number of regulatory filings on a major shareholder of a Kospi/Kosdaq member giving stock gifts to family members or of special relations came to 201 as of July 27 this year, sharply up compared with 161 a year ago.

Biotech entrepreneurs were the most eager in making stock gifts.

Jung Hyun-kyu, chairman and CEO of Kosdaq-listed BioPlus handed down 100,000 shares in the company each to his two children Bo-in and Jae-won on July 1. The stock gifts were worth 4.9 billion won ($3.7 million) in total, based on the stock’s closing price on that day.

The share-out has lowered the chairman`s stake to 26.57 percent, while raising Jung Bo-in’s to 1.19 percent and Jae-won’s to 1.52 percent.

Cha Geun-sig, chairman and CEO of i-Sens also trading on the Kosdaq, on June 29 gave 18.9 billion won worth of 650,000 i-Sens shares as a gift to his eldest son Kyung-ha. Kyung-ha now owns a 5.41 percent stake in i-Sens with a nearly 4.7 percent stake newly added. The chairman had passed down 50,000 shares to Kyung-ha and 25,000 to eldest daughter Yoon-ha last year.

Stock gift by a company`s owner can serve as a cue for investors that the company`s stock price has hit the bottom, one analyst said.

Stock prices of both BioPlus and i-Sens gained over 20 percent after the firms disclosed the stock gifts, observed the analyst. But their business prospects also helped their stock.

BioPlus is preparing to market dermal fillers, used for smoothing facial wrinkles, in China.

i-Sens recorded strong earnings growth for the January-June period this year, with its business outlook looking bright with smooth progress in the development of the next-generation blood sugar monitoring devices.

By Kim Je-gwan and Cho Jeehyun

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