The CJ Group plans to reenter the biopharmaceutical business by acquiring Chunlab three years after selling CJ Healthcare to Kolmar Korea.

CJ Group is venturing back into the biopharmaceutical industry with its recent acquisition of Chunlab, specializing in the research and development of the microbiome.
CJ Group is venturing back into the biopharmaceutical industry with its recent acquisition of Chunlab, specializing in the research and development of the microbiome.

According to industry insiders, CJ CheilJedang acquired a 44 percent stake in Chunlab through purchasing existing shares and new shares issued through a capital increase at about 98.3 billion won ($85.2 million).

Chunlab, a company established in 2009 by Professor Chun Jong-sik of Seoul National University, specializes in the research and development of microbiome, a combination of microbe and biome referring to the trillions of microorganisms and their genes in the human body.

CJ CheilJedang plans to develop next-generation new drugs using microbiome technology and expand its application to diagnostics and customized health functional foods. It is also considering spinning off its health business division to a company in company (CIC).

CJ Group was one of the first conglomerates to enter the biopharmaceutical business after acquiring Yupoong Pharmaceutical in 1984 and Hanil Pharmaceutical in 2006. With the two acquisitions, the group established CJ Healthcare, which succeeded in developing Korea's 30th novel treatment, K-CAB, a new drug for gastroesophageal reflux disease.

However, while preparing for the domestic launch of K-CAB, the group sold CJ Healthcare to Kolmar Korea for 1.31 trillion won in 2018.

At that time, CJ Healthcare's sale price was one of the highest in the industry. The company proved its ability to develop new drugs and possessed various other hit products, such as its hangover-relieving drink Condition and the health drink Heotgaesoo.

The company, which has since changed its name to inno.N has been showing robust growth and is about to go public on the Kosdaq stock market next month, with a market valuation after listing expected to reach 1.7 trillion won.

inno.N's competitiveness lies in K-CAB, as the product has quickly become a blockbuster drug that has exceeded 100 billion won in cumulative prescriptions in 22 months of its release.

However, industry experts expect that CJ Group will conduct operations differently this time around with Chunlab as the company specializing in the microbiome.

"Rather than securing pipelines in various fields like CJ Healthcare, the company will highly likely limit their R&D investment to the microbiome," said Lee Jun-soo, an analyst for Prophet Asset Management.

Aside from the acquisition, CJ CheilJedang has also invested and collaborated in the microbiome field in various ways.

In 2019, the company invested in Ko Bio Labs, a microbiome venture company. This year, the company also signed an MOU for joint research and development with Chunlab, Ajou University Medical Center, and Microbiotix.

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