이 기사는 2021년 10월 06일 07:57 thebell 에 표출된 기사입니다.

An evaluation process for Korean biopharmaceutical company SillaJen will take place in two months, with market insiders paying attention to whether its stock trading will be able to be resumed one and a half years after the suspension.

The company faced the possibility of delisting from the tech-heavy Kosdaq market as its stock trading had been halted since May 2020 after the firm's former executives were arrested on charges of embezzlement and breach of duty.

After that, the nation's bourse operator Korea Exchange (KRX) said it will keep SillaJen on the Kosdaq and decide its fate after evaluating its status at the end of November this year. SillaJen has to apply for reevaluation before the deadline, which is November 30, for another review on its listing status. The decision is expected to be finalized within this year.

SillaJen successfully established a stable governance structure by changing its largest shareholder to M2N, which acquired a 18.23% stake in the company in July this year. It also raised a combined 100 billion won through two rounds of rights offerings.

The company plans to normalize its business through mergers and acquisitions (M&As). A grace period given to SillaJen to avoid from being designated as a special supervisory stock item by the KRX will expire this year. The company listed its shares on the Kosdaq in December 2016. The KRX designates Kosdaq-listed companies as special supervisory stocks if they fail to meet the requirements for quarterly sales of 300 million won, half-yearly sales of 700 million won, and annual sales of 3 billion won.

The biotechnology company is carrying out clinical trials of its anti-cancer drug Pexa-Vec whose U.S. phase 3 trial as a liver cancer target treatment was suspended.

Its revenue, which was 9.1 billion won in 2019, decreased to 1.7 billion won in 2020 and 200 million won in the first half of this year. If the current trend continues, the company may not be able to meet the quarterly sales requirement of 300 million won next year. SillaJen must secure a profit source ahead of the KRX’s evaluation on its sustainability at the end of this year. The company is pursuing M&As in a bid to establish a profitable business in addition to its mainstay research and development.

The company is currently reviewing a possible target for acquisition by forming an internal strategic organization led by vice president Shin Hyun-pil.

Shin has been focusing on strategic planning after M2N chief executive Kim Sang-won was appointed as SillaJen chief executive in August.

“We aim to sign an M&A agreement within this year to meet the sales requirement from the first quarter of next year,” said an official at SillaJen. “We have selected healthcare companies including health supplementary food companies as candidates.” (Reporting by A-ran Sim)