Ildong Pharmaceutical said on Wednesday that it will separate its research and division (R&D) department and establish a subsidiary to boost profitability and R&D.

Ildong Pharmaceutical will maintain a 100 percent stake in the new company as the parent company. The tentative name of the corporation is Yunovia and is scheduled to be launched on Nov. 1 after relevant procedures at an extraordinary shareholders' meeting.

The company said it will focus on enhancing corporate and shareholder value through the rapid improvement of its financial structure and increased profitability, strengthening its momentum related to new drug R&D, and expanding investment attraction.

An official from Ildong Pharmaceutical clarified the role of its existing subsidiaries. 

“Ildong Holdings is the parent company of Idience and Ildong Biosciences but Ildong Pharmaceutical is the parent company of Yunovia," said the company official. “Idience is focused on anticancer drugs, while Ildong Bioscience is focusing on the contract manufacturing of raw materials and the sales of health functional foods.”

The company further explained that the division will secure a stable financial structure for  Ildong Pharmaceutical by resolving R&D costs to produce more steady sales growth.

Additionally, the newly established corporation as an indepedent organization now has more favorable requirements in terms of securing partners such as open innovation and investment attraction. 

In particular, it plans to raise the necessary capital by attracting more than 100 billion won (approximately $76 million) in large-scale investment in new corporations by utilizing existing new drug development projects such as diabetes type 2 treatment,  digestive ulcer treatment, and Parkinson's disease treatment.

"The new subsidiary will be able to focus on R&D in its position, and Ildong Pharmaceutical will also enjoy profits depending on the success of new drug development or license out agreements in the future,” said a company official.