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Privately held Korean biotech ArborMed is back in the funding game after a three-year hiatus. The company is more attractive to investors than in the previous round as it has addressed key pipeline production risks and refined its cash cow strategy.

After finalizing the financing, the company's focus will now be on proving its business viability. The company plans to focus on delivering real results in the technology export and complex generics businesses. Based on this, it is expected to start the process of listing on KOSDAQ next year.

◇'ARBM-101 Production Efficiency + Complex Genericization' Appeal

According to the bio-industry on the 14th, ArborMed is currently attracting Series C investment. The investment target is 15 billion won. The first payment of about 4.5 billion won has been made, and additional payments will be made over the next two months.

This round comes three years after the company completed its Series B funding. The company closed its Series B in November 2021 and has raised a total of 27 billion won. The company's major financial investors include the Korea Development Bank and SBI Investment. Among Korean pharmaceutical companies, Ildong Pharmaceutical injected 6 billion won as a strategic investor (SI).

Arbormed was founded in 2017 by CEO Park Kyo-jin. He has experience in starting MedCI, a U.S. drug technology transfer consulting firm. He has a reputation as a business development (BD) expert who has conducted global technology transfer consulting for about 30 new drugs, including deals with RegoChemBio and Takeda Pharmaceuticals. In addition to Mr. Park, the core management team includes Co-CEO Weonbin Im(CTO), a former head of Dong-A S.T.'s new drug research center, Vice President So-Young Eun(CSO), and Vice President Eok Park(CDO).

The current drug pipeline is focused on ARBM-101, a candidate for the treatment of Wilson's disease. Wilson's disease is a rare disorder in which the body is unable to excrete accumulated copper due to a genetic abnormality. It is being developed as a first-in-class drug as there is no treatment. It is currently in a multi-country Phase 1 clinical trial. It was selected as a research project by the KDDF(Korea Drug Development Fund) last year.

Another competitive advantage is that it has secured a sustainable revenue stream through its complex generics business. Complex generics are drugs that are difficult to manufacture and develop and have a limited number of generics. It is characterized by its profitability due to the limited number of competing products. With this in mind, ArborMed has built a business model that allows it to obtain U.S. regulatory approval for complex generics and import and distribute finished drugs.

Investors were attracted to Series C because it de-risked ARBM-101 production and advanced the complex generics business. ARBM-101 is a peptide produced by methanogenic microorganisms that are difficult to cultivate, so it was difficult to produce raw materials. Since the Series B funding, the company says it has succeeded in developing and optimizing the production process. The company plans to produce GMP clinical samples soon.


In the complex generics business, the company has secured two additional overseas partners and one domestic partner since Series B and signed agreements for the exclusive U.S. license and distribution rights for a total of eight complex generics. "The new partners are all GMP-certified companies," said an official from ArborMed, "and are expected to be able to respond on time to the ANDA application and due diligence of the U.S. Food and Drug Administration (FDA) production facilities."

◇Focusing on proving business viability such as technology export... Pursuing special technology listing

After finalizing the Series C investment, the focus will be on creating tangible results. The company has proposed the export of ARBM-101 technology and obtaining approval for one of the products in the complex generics business pipeline.

In the case of ARBM-101, the company plans to initiate technology transfer discussions early and achieve results by the end of the year, although the timeline for clinical entry is slower than expected. "We aim to export ARBM-101 early this year, before the Phase 1 efficacy results," said an official from ArborMed. "We are currently in full-scale discussions with global pharmaceutical companies to export the technology, and we will be able to show results within this year."

On the complex generics side, the company will begin the approval process for one of its pipeline products this year. In the first quarter of this year, we will review the Common Technical Document (CTD) and file an ANDA for approval. We will then fund the FDA approval studies and CTD dossiers for one product for which we plan to file an ANDA in the second half of the year.

The earliest of these products is expected to be an adjunct to general anesthesia from Penmix. It is currently under CTD review and is targeted for submission in the first half of this year. India's Ethicon Life Sciences' injection for severe osteoporosis will be submitted in the second half of this year. Both products are expected to be approved by the end of the year and be available for sale next year.

Based on this, the company is expected to pursue listing on KOSDAQ through the Technology Special Exemption System next year. The technology special exemption system is a system that helps companies to list on the KOSDAQ by exempting financial items from the KOSDAQ listing requirements and receiving technical evaluations from specialized organizations designated by the Korea Exchange. Two of the specialized organizations must be rated A and BBB or higher, respectively.

"We expect to make significant achievements in technology exports and complex generics within the year," said an official from Arbormed. "We aim to apply for the technical evaluation early next year and begin the listing process in earnest in the first half of the year."