Korea / Special Sits, Pairs, Index Rebalancing, Clepsydra Capital

Sanghyun Park

Korea / Special Sits, Pairs, Index Rebalancing

Clepsydra Capital

Investigate special situations, pairs, and index rebalancing trades in Korea.

Event-Driven

<ul>
<li>The declining appeal of the separator business prompts SK to seek buyers for SKIET through block deals amid financial pressures. The first deal is anticipated despite recent stock price drops.</li>
<li>SK Ecoplant looks to sell its 37.6% stake in SK Oceanplant. Negotiations stall over the former major shareholder's 20% stake, prompting consideration of a block deal.</li>
<li>SK Bioscience, under SK Discovery, faces possible sale amid SK's bio company reshuffle. SK Chemicals may bring SK Biopharm under its wing to help SK Inc focus on semiconductors/batteries.</li>
</ul>


The declining appeal of the separator business prompts SK to seek buyers for SKIET through block deals amid financial pressures. The first deal is anticipated despite recent stock price drops.
SK Ecoplant looks to sell its 37.6% stake in SK Oceanplant. Negotiations stall over the former major shareholder's 20% stake, prompting consideration of a block deal.
SK Bioscience, under SK Discovery, faces possible sale amid SK's bio company reshuffle. SK Chemicals may bring SK Biopharm under its wing to help SK Inc focus on semiconductors/batteries.


Block Deal Prospects Arising from SK Group's Corporate Reshuffle

Global Healthcare Analyst

Tina Banerjee

<ul>
<li>
<a href="https://www.smartkarma.com/entities/sk-bioscience-co-ltd" target="_blank" data-smartkarma-citation="entities:31484:1" rel="noopener">SK Bioscience (302440 KS)</a> secures 60% stake in IDT Biologika, a global CDMO company with state-of-the-art manufacturing facilities in Germany, for KRW339B ($244M). The valuation seems reasonable.</li>
<li>The transaction paves the way for SK bioscience to strengthen its global presence, notably in Europe and the U.S., and to diversify its business by expanding into bulk drug substances.</li>
<li>Based on the existing CDMO contracts, IDT Biologika’s outlook remains positive. SK bioscience aims to more than double its revenue and stabilize operating profit margins at 20%+.</li>
</ul>



SK Bioscience (302440 KS) secures 60% stake in IDT Biologika, a global CDMO company with state-of-the-art manufacturing facilities in Germany, for KRW339B ($244M). The valuation seems reasonable.
The transaction paves the way for SK bioscience to strengthen its global presence, notably in Europe and the U.S., and to diversify its business by expanding into bulk drug substances.
Based on the existing CDMO contracts, IDT Biologika’s outlook remains positive. SK bioscience aims to more than double its revenue and stabilize operating profit margins at 20%+.


SK Bioscience (302440 KS): Acquiring Majority Stake in IDT Biologika- A Step Toward ‘Globalization’

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Equity Bottom-Up

<ul>
<li>There has been a new, highly mutated COVID variant found in South Africa named Omicron by the WHO.</li>
<li>Is this the onset of the 'dark winter' that many people have warned? In this insight, we will provide further details of this new COVID variant Omicron.</li>
<li>While the world waits on more data on the Omicron variant, we believe SK Bioscience, SD Biosensor, and Seegene could soundly outperform the market in the next several weeks. </li>
</ul>


There has been a new, highly mutated COVID variant found in South Africa named Omicron by the WHO.
Is this the onset of the 'dark winter' that many people have warned? In this insight, we will provide further details of this new COVID variant Omicron.
While the world waits on more data on the Omicron variant, we believe SK Bioscience, SD Biosensor, and Seegene could soundly outperform the market in the next several weeks. 


The Highly Mutated Omicron COVID Variant - Onset of the Dark Winter?

<ul>
<li>In 3Q23, revenue jumped 2.5x YoY and 12.1x QoQ to KRW231.8 billion, mainly due to the inflow related to Novavax vaccine contract settlement and resumption of flu vaccine production.</li>
<li>Despite significantly improved Q3 result, SK Bioscience is expected to end 2023 on a weak note, due to the absence of contract manufacturing revenue from Novavax.</li>
<li>SK Bioscience has applied for EUA for the updated Novavax COVID-19 vaccine in Korea. Once approved, the company targets to distribute the vaccine during 2023–2024 winter seasons in Korea.</li>
</ul>


In 3Q23, revenue jumped 2.5x YoY and 12.1x QoQ to KRW231.8 billion, mainly due to the inflow related to Novavax vaccine contract settlement and resumption of flu vaccine production.
Despite significantly improved Q3 result, SK Bioscience is expected to end 2023 on a weak note, due to the absence of contract manufacturing revenue from Novavax.
SK Bioscience has applied for EUA for the updated Novavax COVID-19 vaccine in Korea. Once approved, the company targets to distribute the vaccine during 2023–2024 winter seasons in Korea.


SK Bioscience (302440 KS): Significantly Improved 3Q Result Benefitted From One-Time Payment

<ul>
<li>
<a href="https://www.smartkarma.com/entities/sk-bioscience-co-ltd" target="_blank" data-smartkarma-citation="entities:31484:1" rel="noopener">SK Bioscience (302440 KS)</a> resumed flu vaccine shipment for 2023–24 flu season. The company temporarily stopped the production of flu vaccine to focus on the supply of COVID-19 vaccine.</li>
<li>In August 2023, SK Bioscience has entered joint development agreement with Australia-based privately held biotechnology company Vaxxas to develop a second-generation needle-free patch delivery of typhoid conjugate vaccine.</li>
<li>The company’s successful phase 2 clinical trial for first-in-class pneumococcal conjugate vaccine (PCV20+) in pediatric market is a step toward entry to the premium vaccine market.</li>
</ul>



SK Bioscience (302440 KS) resumed flu vaccine shipment for 2023–24 flu season. The company temporarily stopped the production of flu vaccine to focus on the supply of COVID-19 vaccine.
In August 2023, SK Bioscience has entered joint development agreement with Australia-based privately held biotechnology company Vaxxas to develop a second-generation needle-free patch delivery of typhoid conjugate vaccine.
The company’s successful phase 2 clinical trial for first-in-class pneumococcal conjugate vaccine (PCV20+) in pediatric market is a step toward entry to the premium vaccine market.


SK Bioscience (302440 KS): Flu Vaccine Output Resumes; Next-Gen Typhoid Vaccine Is On Card

South Korea

Hugel, Inc. is a Bio-pharmaceutical company that focuses on developing beauty/cosmetics related products.  The Company's main products include botulinum toxin and fillers.

Green Cross Corporation manufactures household medical drugs. The Company's product includes medicines for cold and fever, nutrition, antiseptic drug, and a lip balm.

Medy-Tox Inc. is a biopharmaceutical company.  The Company researches, develops and manufactures biopharmaceutical products using clostridium botulinum which is a microorganism toxin.

Seegene, Inc. manufactures In Vitro Diagnostic (IVD) products mainly through molecular diagnostic method.  The Company provides diagnostic & screening products for cancer, sepsis, influenza and virus infection.

BIONEER Corp. provides molecular biology products & services.  The Company's product includes oligo synthesis, nucleic acid amplication and purification kits, and instruments for detecting biowarfare agents.

Green Cross Holdings Corporation is a holding company, which operates pharmaceutical, biotechnology, distribution system, life insurance, and healthcare entities.  The Company also invests in biotechnology venture capital and markets medical research information.

SillaJen, Inc. provides medical research and development services. The Company researches and develops treatment of cancer based on genetic recombination virus. SillaJen conducts its business in South Korea and the United States.

Eubiologics Co. Ltd. researches and develops biopharmaceuticals. The Company offers bacterial vaccines for new epidemics and antibiotic resistance. Eubiologics operates in South Korea.

Genexine Co., Ltd. is bio technology company. The Company specialize in the development of therapeutic vaccines and next generation antibody fusion protein medications.

Pharmicell Co.,Ltd. is a Biotechnology company.  The Company's business area inlcudes stem cell therapeutics, Stem cell banking, Bio-based business and Cosmetics.

TG Therapeutics, Inc. is a clinical-stage biopharmaceutical company focused on the acquisition, development and commercialization of innovative pharmaceutical products for the treatment of cancer and other underserved therapeutic needs. Currently, the company is developing two therapies targeting hematological malignancies, specifically, relapsed and refractory non-Hodgkins lymphoma.

Arrowhead Pharmaceuticals, Inc. operates as a biotechnology company. The Company develops medicines that treat intractable diseases by silencing the genes. Arrowhead Pharmaceuticals offers its services in the United States.

Myriad Genetics, Inc. develops and markets molecular diagnostic products to provide physicians with information to help guide the care of their patients, to prevent disease, delay the onset of disease, or catch disease at an early stage.

Agios Pharmaceuticals, Inc. discovers and develops therapeutics in the field of cancer metabolism. The Company develops drugs focusing on glycolysis, fatty acid metabolism, and autophagy. Agios Pharmaceuticals operates in the United States.

Walvax Biotechnology Company Limited develops, manufactures and sells bio-pharmaceutical vaccination products.  The Company's products include haemophilus influenzae type b conjugate vaccine and meningococcal group A,C bivalent polysaccharide conjugate vaccine.

Geron Corporation is a clinical stage biopharmaceutical company developing a first-in-class telomerase inhibitor, imetelstat, in hematologic myeloid malignancies.

ACADIA Pharmaceuticals Inc. is a biopharmaceutical company focused on the discovery, development and commercialization of small molecule drugs for the treatment of central nervous system disorders. The company is currently working on the treatment of induced dysfunction in Parkinson's disease ,schizophrenia, neuropathic pain and glaucoma.

Celldex Therapeutics Inc., a biopharmaceutical company, uses applications of immunology to prevent and treat diseases. The Company's products treat autoimmune diseases, cardiovascular diseases, cancer, and inflammation, as well as infectious diseases and organ transplant rejection.

PTC Therapeutics, Inc. provides biopharmaceutical products. The Company develops orally administered and small-molecule drugs for genetic disorders, oncology, and infectious disease. PTC Therapeutics operates in the United States.

Amicus Therapeutics, Inc. is a biopharmaceutical company that develops orally-administered, small molecule drugs to treat human genetic diseases.  The drugs, called pharmacological chaperones, are being developed to treat Fabray, Gaucher, and Pompe disease.

SK Bioscience Co.,Ltd. operates biopharmaceutical businesses. The Company produces vaccines, sky cellflu prefilled syringes, sky cellflu quadrivalent prefilled syringes, varicella drugs, and other related products. SK Bioscience markets its products throughout South Korea.

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SK Bioscience (302440 KS)

Block Deal Prospects Arising from SK Group's Corporate Reshuffle

SK Group seems to have chosen a block deal of SK Innovation's stake in SKIET as the first step to improve SK On's financial structure. SK...

Sanghyun Park