“IPO-dependent structure hinders virtuous cycle in 안전한 바카라 사이트 is the ‘golden time’ for M&A”

[by Sung, Jae Jun] "An exit structure reliant solely on initial public offerings (IPOs) could ultimately drive the entire biotechnology industry into crisis. When the exit path is blocked, entry opportunities also diminish, resulting in a self-perpetuating vicious cycle."

Cheon Hwan-ju, Head of the Pharmaceutical and Bio-안전한 바카라 사이트 Planning Team at the Korea Health 안전한 바카라 사이트 Development Institute (KHIDI), recently discussed the structural challenges and future direction of Korea’s pharmaceutical and biotechnology sector in an interview with <THE BIO. "Korea's exit structure, which is excessively dependent on IPOs, is disrupting the 안전한 바카라 사이트's virtuous growth cycle," he emphasized. "For Korean companies to evolve into truly global pharmaceutical players, it is essential to move beyond the IPO-centered model and pursue diversified exit strategies, including mergers and acquisitions (M&A)."

Korea’s biotechnology ecosystem has experienced rapid growth, with hundreds of new companies established annually. However, the 안전한 바카라 사이트 remains heavily reliant on IPOs as the primary mechanism for investment recovery. According to Cheon, although roughly 300 biotech startups are launched each year, only about 20 successfully achieve an IPO.

"While it takes an average of 12.6 years for a company to go public, the maturity period for Korean venture capital (VC) funds is only about eight years. This discrepancy forces many companies to pursue premature IPOs before reaching full maturity, with the resulting losses ultimately borne by investors and the broader 안전한 바카라 사이트," Cheon warned. "When IPO exits become obstructed, new investment inevitably declines, disrupting the virtuous cycle of 'startup-growth-exit. If such a vicious cycle takes hold, the overall vitality of the 안전한 바카라 사이트 will diminish, potentially precipitating a systemic crisis."

Recently, high interest rates, sluggish economic growth, and a depressed stock market have severely weakened the IPO landscape, leading to a rapid deterioration in the investment climate for Korean biotechnology companies. Although the United States and Europe have similarly experienced a sharp decline in pharmaceutical and biotech IPO activity amid rising interest rates, global pharmaceutical firms in these regions are compensating by expanding their capital recovery channels through large-scale 안전한 바카라 사이트amp;A.

◇“Facing both a crisis and an opportunity…Now is the golden time for Korea’s biotechnology 안전한 바카라 사이트”

Cheon observed that the current structural crisis confronting Korea’s pharmaceutical and biotechnology 안전한 바카라 사이트 also serves as a catalyst for new opportunities. He underscored the importance of restoring a virtuous 안전한 바카라 사이트 cycle, asserting, “Without the establishment of a sustainable M&A ecosystem, neither startups nor investments can endure.” Nevertheless, Cheon expressed cautious optimism, suggesting, “The present crisis may in fact represent a crucial moment, a so-called ‘golden time,’ for Korean companies to advance into the global market.”

Cheon cited Japan’s experience in the 1990s as a representative case. During that period, the Japanese government’s ‘drug price reduction’ policy triggered a downturn in the overall pharmaceutical sector. However, Japan successfully overcame the crisis through an aggressive 안전한 바카라 사이트amp;A strategy, exemplified by the 2005 merger of Daiichi and Sankyo, which gave rise to Daiichi Sankyo.

At that time, Sankyo ranked third and Daiichi ranked sixth or seventh in Japan’s pharmaceutical 안전한 바카라 사이트. Amid widespread concerns over drug price reductions and stagnant domestic demand, there was growing recognition of the need for 안전한 바카라 사이트-wide consolidation and restructuring. The merger of the two companies became a defining turning point for the Japanese pharmaceutical 안전한 바카라 사이트, serving as a catalyst for its advancement onto the global stage. In the years following the merger, Daiichi Sankyo evolved into one of the world’s top 20 pharmaceutical companies, expanding its global footprint, particularly in the areas of oncology and vaccines.

The merger generated substantial synergies by integrating the two companies' complementary strengths and distinct market focuses. Daiichi, recognized for its expertise in antibiotics and anticancer drugs, had built a network across emerging Asian markets, while Sankyo maintained a strong domestic presence in Japan, specializing in cardiovascular treatments (hypertension and hyperlipidemia). The union of Japan’s third-ranked and sixth-to-seventh-ranked pharmaceutical firms combined domestic market stability with global expansion potential, harmonizing their portfolios and establishing the strategic foundation for Daiichi Sankyo's emergence as a globally prominent oncology leader.

"Korea is currently facing circumstances similar to those Japan experienced at the time. Under the national health insurance system, pharmaceutical price regulations are tightening, while investment contraction is diminishing industrial vitality," Cheon stated. "Japan was able to pursue large-scale 안전한 바카라 사이트amp;As because it already had a stable domestic market with strong sales foundations. In contrast, Korea’s relatively small market size and limited experience in developing blockbuster new drugs make it difficult to implement such strategies immediately."

◇"안전한 바카라 사이트amp;A is not an option for growth, but a necessity"

"Achieving entry into the global top 50 is difficult through organic growth alone. Without bold 안전한 바카라 사이트amp;A, it is nearly impossible to secure sustainable global competitiveness," Cheon emphasized. "안전한 바카라 사이트amp;A should not be viewed merely as a means of acquiring new drug assets, rather, it serves as a strategic tool for structural innovation and accelerated industrial growth." In fact, many global pharmaceutical companies have strengthened their competitiveness by leveraging 안전한 바카라 사이트amp;A to simultaneously acquire advanced technologies and expanded market access.

The multinational pharmaceutical giant Pfizer, for instance, acquired Warner-Lambert, thereby securing the hyperlipidemia treatment Lipitor (atorvastatin), and more recently expanded its antibody-drug conjugate (ADC) portfolio through the acquisition of Seagen. Bristol-Myers Squibb (BMS) strengthened its oncology pipeline by acquiring Celgene, securing the blood cancer therapy Revlimid (lenalidomide) and a portfolio of chimeric antigen receptor T-cell (CAR-T) therapies. Similarly, AbbVie’s acquisition of the Irish pharmaceutical company Allergan enabled it to diversify into the aesthetic and neurological sectors with Botox (onabotulinumtoxinA). In Japan, Daiichi Sankyo strengthened its oncology capabilities through its merger with Sankyo and later, in partnership with AstraZeneca (AZ), successfully developed Enhertu (trastuzumab deruxtecan), further consolidating its position in the global oncology market. Collectively, these cases illustrate that 안전한 바카라 사이트amp;A serves as a comprehensive growth strategy, one that not only secures new drugs but also integrates talent, technology, and market networks.

◇“Government-안전한 바카라 사이트 collaboration must ensure strong execution power”

Cheon proposed that achieving global competitiveness for Korea’s pharmaceutical and biotechnology sectors will require close collaboration between the government and 안전한 바카라 사이트. “The government must establish a strong institutional framework to facilitate M&A, including tax incentives, the creation of dedicated investment funds, and the promotion of corporate venture capital (CVC),” he stated. “Once such an environment is established, private companies can expand their corporate footprints by enhancing their technological capabilities and developing blockbuster novel drugs, thereby positioning themselves to actively pursue strategic M&As.”

At present, major global pharmaceutical companies are maintaining substantial cash reserves, while the valuations of biotechnology firms dropped to less than half of their pre-pandemic levels. Cheon noted that this ‘investment asymmetry’ presents a potential strategic opportunity for Korean pharmaceutical companies.

"Now is the optimal moment for domestic companies to acquire promising global assets and achieve a new phase of growth. With adequate execution capacity and capital management, companies can transform the current crisis into a genuine opportunity," Cheon emphasized. "For an 안전한 바카라 사이트 to reach maturity, diverse exit mechanisms must exist. To sustain a virtuous growth cycle, multiple pathways, such as IPOs, M&A, strategic alliances, and out-licensing, must be systematically developed," he added.