The National Growth Fund is emerging as a new source of capital for Korean biotech. Alteogen (196170.KQ) recently decided to raise 200 billion won ($140 million), bringing to five the number of pharmaceutical and biotech companies named as recipients this year. The fund is seen as seed capital for companies moving beyond a licensing-centered business model to strengthen late-stage trials and in-house manufacturing.
Alteogen plans to issue a combined 200 billion won in classified shares to SkyAlt, a vehicle jointly funded by the National Growth Fund and private equity firm Skylake, according to industry sources on the 9th. The issue consists of 100 billion won each in convertible preferred shares and redeemable convertible preferred shares, with the redeemable shares priced 10.3% above the reference price.
Alteogen will channel the proceeds into business diversification and its own production infrastructure. The company has built a business centered on milestone payments and royalties, signing licensing deals with 10 global drugmakers based on ALT-B4, its platform for converting treatments to subcutaneous injection.
Part of the money will go toward building a plant in Daejeon. The company plans to shift production of the material used in subcutaneous Keytruda from outside contract manufacturers to its own facility, and to directly produce an Aflibercept biosimilar and future drug candidates to improve margins.
Four other pharmaceutical and biotech companies received investment or loan support from the fund earlier this year: Ligachem Biosciences (141080.KQ), SK bioscience, BTgen, formerly STgen Bio, and Kyongbo Pharmaceutical (214390.KS).
Ligachem Biosciences, which develops antibody-drug conjugates, secured 250 billion won in direct investment in June after review by the fund's management committee. It plans to use the money to strengthen late-stage trial capabilities for its core pipeline. The strategy marks a shift from licensing out technology at an early stage toward advancing trials to raise pipeline value.
Companies needing large sums for clinical trials and production capacity received low-interest loans. SK bioscience won approval for 300 billion won in low-interest loans in May. The money will fund global Phase 3 trials of a 21-valent pneumococcal vaccine being developed with Sanofi and an expansion of its vaccine plant in Andong.
BTgen, which is expanding biosimilar contract development and manufacturing facilities in Songdo, received 85 billion won in loan support. The company plans to increase drug substance and drug product capacity by 44% and 170%, respectively. Kyongbo Pharmaceutical, an affiliate of Chong Kun Dang Group, received 20 billion won in loans to build a next-generation ADC manufacturing facility meeting good manufacturing practice standards in South Chungcheong Province and to expand its contract manufacturing business.
Whether support will widen to medical devices and medical artificial intelligence is another point of interest. The fund has yet to invest in the medical device sector, including medical AI. Those companies also need substantial capital for trials, domestic and overseas approvals, capacity expansion and overseas market entry after product development.
Securities analysts have named potential candidates. Mirae Asset Securities highlighted Next Biomedical, Seers Technology and i-SENS based on global competitiveness, selection for cross-ministry projects and funding needs. In medical AI, Lunit, Neurophet and JLK are mentioned. An industry official said medical AI is also drawing the fund's attention and that support is under review, adding that actual investment would have a positive effect on the industry.
Through August, the National Growth Fund had approved a total of 17.9 trillion won in support across all industries: 2.83 trillion won in direct investment, 1.59 trillion won in indirect investment, 6.87 trillion won in infrastructure investment and lending, and 6.59 trillion won in low-interest loans.
A senior industry official said leading companies such as Alteogen and Ligachem Biosciences, which have already proven global competitiveness through technology licensing, are attempting to move away from licensing out by using fund money to build their own production networks or complete late-stage trials. The large supply of capital, the official said, is serving as seed money to lift the industry from a research-centered model to a complete value chain with global commercialization capabilities.