HanAll Biopharma Vice Chairman Kim Sung-wuk unexpectedly sold off part of his stake in HanAll, despite the company’s recent $30 million deal with a U.S. firm to transfer its technology to develop an investigational drug substance.

The company announced last month that it clinched the out-licensing deal with Roivant Sciences for the new drug candidate HL161BKN.

The contract fee alone was $30 million (32.5 billion won), and the drug could raise up to $3 billion in revenue for 15 years if it is commercialized, HanAll Biopharma said. The contract fee was more than one-third of the company’s 2016 annual sales of 82.88 billion won.

On the news of the deal on Dec. 20, shares of HanAll Biopharma also spiked to close at 20,150 won, up from 15,500 won on the previous day. The stock price closed at 24,400 won as of Dec. 29, the last trading day of 2017.

However, the pharmaceutical industry expressed a variety of opinions when the company’s vice chairman Kim Sung-wuk, son of the company’s founder and former chairman, Kim Byung-tae, sold part of his stake in the company.

Through a public filing on Dec. 29, HanAll Biopharma announced the vice chairman’s affiliated company HanAll Consulting and his associated persons Kim Seong-su and Kim Ju-hee sold part of their shares. Following the selling, Kim’s stake in HanAll Biopharma went down to 8.55 percent from 10.73 percent.

Earlier in September, Vice Chairman Kim also dumped his 1.7 million shares in a block deal. A block deal refers to finding the right purchaser and selling shares on a massive scale to the pre-designated buyer after the market closing, not to affect the stock market.

In a block deal, information is partially open. Large stakeholders often use it as a strategy to avert losses amid management concerns.

Some industry observers said Kim’s stake sales despite the company’s growth prospects might be a part of his plan to strengthen his control over HanAll Biopharma via Daewoong Pharmaceutical.

Daewoong acquired HanAll Biopharma in 2015 for 104.6 billion won and dispatched its executives to key positions.

Following the acquisition, HanAll Biopharma’s executives left the firm and those from Daewoong filled the vacant positions. Among the five paid executives except for outside directors, three were replaced with executives from Daewoong – Co-CEO Yoon Jae-choon, director Lee Jong-wook, and director Lee Bong-yong. Co-CEO Park Seung-kook is also from Daewoong, formerly serving as head of Daewoong Biotechnology Research Institute.

Out of the 11 non-paid executives of HanAll Biopharma before the acquisition by Daewoong, only three remained at HanAll.

The replacement of key executives with those from Daewoong and the stake sale of the founder’s son are initial steps to reinforce Daewoong’s influence on HanAll, observers said.

“Stakes of the founder’s son and those of his affiliated persons in HanAll Biopharma went down. Daewoong executives’ takeover of key positions in HanAll seems like a preparation for Daewoong’s firmer grips on HanAll’s major businesses,” a pharmaceutical industry source said. “Daewoong seems to raise its flagging revenue through HanAll Biopharma.”

Others, however, said Vice Chairman Kim would not easily give up on control over HanAll because most of the shares in the recent block deal went to his father and founder Kim Byung-tae.

In fact, 1 million shares out of Kim’s 1.7 million shares, sold through the block deal, were purchased by HanAll Consulting, registered as a real estate agent. The senior Kim is the CEO of HanAll Consulting.

“I heard the founder and his son had different opinions in Daewoong’s acquisition of HanAll. Kim’s stake sales must be personal, irrelevant from changes in the relations between Daewoong and HanAll,” another source said.

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