SK Biopharmaceuticals said that it would make a joint investment with SK Inc., an SK Group subsidiary specializing in investment, into Cala Health, a U.S.-based digital therapy company.
Starting with this investment, the company plans to continue making strategic investments in cutting-edge biopharmaceutical and healthcare companies and try to secure growth engines through innovative technology and research cooperation with promising companies.
According to SK Biopharmaceuticals, Cala Health in Silicon Valley is a leading company in bioelectronic medicines. The company has wearable platform technology applicable to treating neurological and psychiatric disorders and a sales network across the U.S.
Cala has won recognition for its technology by attracting investments from companies, such as Johnson & Johnson Innovation and Novartis. In addition, it launched the world's first non-invasive electrical stimulation essential tremor treatment device in 2019.
SK Biopharmaceutical expects the investment to create great synergy with SK's digital healthcare business. It has conducted research and development of epilepsy seizure detection and prediction algorithms and devices since 2018.
SK has tried to differentiate its business through external collaboration and investment and aims to start clinical trials for its epilepsy seizure detection device this year and release it during the 2023 Consumer Electronics Show.
As a strategic investor, SK Biopharmaceuticals is also exploring the possibility of technological cooperation with Cala in brain science.
"We are happy that SK Biopharmaceuticals, a global biopharmaceutical company, has invested in Cala," said Cala Health CEO Renee Ryan. "For many patients suffering from neurological diseases, the two companies will work together to accelerate the development of innovative treatments."
SK Biopharmaceuticals CEO Cho Jeong-woo also said, "In the future, we will continue to secure innovative technologies by implementing various open innovations such as strategic investments."
Through the digital treatment development business, SK Biopharmaceuticals will be reborn as a healthcare solution company that covers the entire life cycle of patients from brain disease prevention and diagnosis to treatment, Cho added.
The two companies did not disclose the investment amount, citing contractual reasons.
An analyst acknowledged it is common for companies to hide their investment.
“Many companies do not disclose the investment amount to hide the actual value of the company they invested in or how much of the company's fund they put toward the investment," said Lee Jun-soo, an analyst for Prophet Asset Management told Korea Biomedical Review. "This is common practice as shareholders of the company that invested will be unhappy if a company uses all its cash reserve to make investments."
Digital therapy is a treatment method that uses software and devices that directly prevent, manage, and treat diseases using digital technology.
Compared to traditional medicines, it is more efficient regarding R&D costs and time, allows individualized treatment using AI and big data technology, and reduces the risk of side effects.
According to Allied Market Research, a U.S. drug market research firm, the global digital therapy market is growing at 20.6 percent. It will expand from $3.5 billion in 2020 to $23.569 billion in 2030.