Unauthorized reproduction or distribution is illegal and subject to criminal penalties.
Pharm Edaily enforces a zero-tolerance policy and will take strict action.
[Lim Jeong-yeo, Edaily Reporter] On the 13th South Korea‘s pharmaceutical and biotech stock market saw Y2Solution hit the daily price limit on expectations of future growth. U2Bio whose largest shareholder is former Socar CEO Lee Jae woong and whose second-largest shareholder is Daewoong, also closed at the upper limit.
 | | Y2Solution stock chart(Source: KG Zeroin MP Doctor) |
|
Y2Solution Rising Expectations on Growth Potential According to KG Zeroin MP Doctor (formerly Market Point) on the day, Y2Solution closed at 7,260 won, up 28.50% (1,610 won) from the previous session. The surge is believed to have been driven by a premium Pharm Edaily article released on portal sites titled “Y2Solution Vice President Oh Jong-min ’This Year Is a Major Turning Point for Three Advanced Businesses… Revenue Set to Double.‘”
In the article, Vice President Oh Jong-min expressed confidence that growth would accelerate on the back of the company’s stable core power supply unit (PSU) business, combined with the addition of a dry age related macular degeneration treatment, RPESC-RPE-4W, currently being developed by US joint venture Luxa.
Oh stated, “The Phase 1/2a clinical trial is progressing very smoothly,” adding, “While existing treatments have only slowed disease progression, Luxa‘s therapy has secured data showing actual improvement in visual acuity, earning it recognition as a ’game changer‘ in the industry.”
Y2Solution holds a 50% stake in Luxa, which is reportedly receiving proposals for a backdoor listing on Nasdaq. Oh said, “We will comprehensively review which direction best maximizes corporate value and shareholder interests and aim to make a meaningful decision within this year.”
In addition, BioSolution is rapidly expanding revenue through its biofuel business. After entering the business last year, it generated 40 billion won in revenue in less than six months and has set this year’s revenue target at 250 billion won more than six times last year‘s level.
Meanwhile, Y2Solution’s consolidated revenue last year totaled 165.7 billion won up 7.3% from 154.5 billion won the previous year reflecting the inclusion of newly consolidated subsidiaries and expansion into new businesses.
Operating profit, however, turned negative during the same period. The company posted an operating loss of 1.7 billion won last year, a reversal from an operating profit of 2.8 billion won the year before. The company explained that the loss was temporary caused by weakened demand in downstream industries that reduced profitability.
 | | U2Bio stock chart (Source: KG Zeroin MP Doctor) |
|
Eyes on U2Bio‘s Transformation into a “Venture Holding Company” U2Bio closed the day at 14,670 won, up 29.94% (3,380 won). Since late last year, when control shifted from NDS to former Socar CEO Lee Jae-woong, U2Bio has been undergoing a period of dramatic change.
U2Bio will hold a shareholders’ meeting on March 30 at its headquarters in Songpa-gu, Seoul, to vote on agenda items including cash dividends, a corporate spin-off, a company name change, and board appointments.
The most significant agenda item is the spin off. Through a split up the surviving company will be renamed ZGOO Holdings, while the newly established company will retain the name U2Bio.
Among existing business divisions, contract research organization (CRO) and biotechnology (BT) operations will be housed under ZGOO Holdings, while the new U2Bio will focus on diagnostics and medical IT.
ZGOO Holdings plans to transition into a venture holding company, pursuing strategic investments, subsidiary management, and optimization of its business portfolio.
Proposed board members include inside directors Lee Jae woong (largest shareholder) and Kim Yo han (largest shareholder of SC Solutions), and outside director Kang Ji yeon an assistant professor at Singapore Management University.
Lee Jae woong born in 1968, earned a bachelor‘s degree in computer science and a master’s degree from Yonsei University. He founded Daum Communications (now Kakao) and Socar, and led Daum Communications as its largest shareholder for nearly 20 years between 1995 and 2014. His decision to acquire U2Bio, a diagnostics company founded in 2009, is reportedly based on his long standing relationship with U2Bio founder Kim Jin tae.
Lee announced late last year that he would acquire 3.4 million common shares of U2Bio, worth 17.3 billion won, previously held by NDS, securing a 44.11% stake. The first tranche was completed in November, with the second tranche scheduled to be finalized in May.
Lee immediately resold part of the first tranche to bring in new shareholders: 1 million shares to Krafton Chairman Chang Byung-gyu 600,000 shares each to SC Solutions and Menoto Korea; 200,000 shares each to StyleShare founder Yoon Ja young and former Musinsa Partners director Sohn Young dae and 100,000 shares to Jang Hyuk head of Socar‘s Strategy Unit. All shares were sold at 5,084 won per share.
Furthermore, on the 12th of last month, Daewoong transferred 564,745 treasury shares (0.97%), worth 12.1 billion won, to U2Bio through an in kind contribution. At the same time U2Bio conducted a third party allotment capital increase resulting in Daewoong acquiring 2,388,278 newly issued shares (14.99%) of U2Bio.
Once the new share issuance and Lee’s purchase of NDS‘ remaining stake are completed, the shareholder structure will consist of Lee Jae woong as the largest shareholder (20.6%), followed by Daewoong (15%), CEO Kim Jin-tae (8.2%), SCG Solutions (6.3%), and Chang Byung-gyu (3.8%).
Edaily attempted to contact U2Bio for comment regarding the stock price movement on the day, but was unable to reach the company.
