Bukwang Pharmaceutical’s headquarters in Sangdo-dong, southwestern SeoulBukwang Pharmaceutical has entered the single representative system of Lee Woo-hyun, chairman of its largest shareholder, OCI Holdings. With the end of the separate representative system, which has continued even after OCI Holdings (formerly OCI) became Bukwang’s largest shareholder last year, the company's next steps are drawing the industry’s attention.

Bukwang Pharmaceutical announced the transition to a sole representative system under Lee in a public notice Friday. Lee is the third-generation owner of OCI and became the chairman in May after OCI launched OCI Holdings and switched to a holding company system. Co-CEO Yoo Hee-won has resigned.

Bukwang remained the separate representative system of Lee and Yoo even after OCI Holdings became its largest shareholder through a 146 billion won ($113 million) equity investment in February last year, but their "uncomfortable cohabitation" ended after about two years.

Yoo, a former Bukwang Pharmaceutical Research Institute executive, has been leading R&D as the executive vice president of clinical affairs. Regarding Yoo's resignation and future moves, a Bukwang official said, "It was due to a personal reason. He will remain as an advisor and assist in R&D."

At the time of last year's equity investment decision, OCI Holdings explained that it had established a joint management system through an agreement between shareholders to mutually consult on important management judgments, such as new product development, investment decisions, and large-scale borrowing.

In particular, Bukwang stressed that it would create synergy by combining its R&D capabilities in the biopharmaceutical field with its global business capabilities and financial strength. The company also said it would speed up developing anticancer drugs through joint management with OCI.

That also explains why the industry pays attention to what effects the leadership change will have on its R&D activities.

In addition to the recently acquired Protekt Therapeutics, an Israel-based company that develops treatments for neurodegenerative diseases, Bukwang’s subsidiaries include Bukwang Medica, a health-functional food maker, Dyna Therapeutics, and Contera Pharma, a Denmark-based company that develops treatments for the central nervous system.

In 2019, the company formed a joint venture with Singapore-based drug development company Aslan Pharmaceuticals to form JAGUAHR Therapeutics. Dyna Therapeutics is developing SOL-804 for prostate cancer, Contera Pharma is developing Parkinson's disease dyskinesias, central nervous system therapies, and treatments for intractable rare diseases, and JAGUAHR Therapeutics is developing immuno-oncology drugs.

OCI Holdings acquired a 10.9 percent equity stake in Bukwang Pharmaceutical last year and has maintained its stake. OCI Holdings classifies Bukwang Pharmaceutical as a subsidiary. The holding company explained in a public notice that it reclassified Bukwang as an affiliate because OCI believes it has a significant influence on Bukwang as it can participate in the decision-making bodies of the investee company.

Regarding the CEO change, OCI Holdings maintains that its plan to pursue the bio sector business through Bukwang remains unchanged. For now, OCI Holdings plans to maintain the sole representative system of Chairman Lee.

"There is little change with this change in representation. R&D will continue," an OCI Holdings official said.

Besides, OCI succeeded in developing polysilicon, a core material for solar power generation, for the first time in Korea in 2008. It also operates the pesticide business and reagent business. The company recently expanded its portfolio to high value-added high-tech materials, such as semiconductors, secondary batteries, and eco-friendly materials.

According to its third-quarter report, OCI Holdings sold all 11,925 shares (0.01 percent stake) of Yungjin Pharmaceutical earlier this year.