DongKoo Bio & Pharma, a Korean company known for its dermatological products, has announced a strategic investment of 10 billion won ($7.2 million) into Qurient, a local biotech, becoming its largest shareholder.

Through this latest investment, DongKoo will acquire approximately 2.56 million new shares in Qurient at a price of 3,909 won per share.

Through the investment, Qurient will secure a solid financial foundation and a reliable strategic investor and DongKoo Bio & Pharma will be able to appoint two out of the five board members, ensuring a blend of governance and operational independence crucial for Qurient's ongoing R&D-focused management strategy.

This investment is part of a larger 13.5 billion won rights offering initiated by Qurient, aimed at stabilizing shareholder composition and bolstering financial health following previous fundraisings.

Along with the strategic investment from DongKoo Bio & Pharma, Premier IBK K-Bio Vaccine Investment Fund, a government-led fund, invested an additional 3.5 billion won in redeemable convertible preference shares.

The fund had previously invested 3.5 billion won in perpetual convertible bonds in December last year.

"By strategically investing in companies with high growth potential and business synergies, we aim to secure future growth engines that break free from the limitations of small and medium-sized pharmaceutical companies with relatively limited capital," DongKoo Bio & Pharma CEO Cho Yong-joon said. "With the largest investment in company history, we will strengthen our development capabilities and expand our pipeline to become a total healthcare company encompassing prevention, diagnosis, treatment, and management, and optimize synergies through the strengths of both companies."

Qurient CEO Nam Ki-yean also said, "The company's financial stability and improved shareholder composition are significant in enhancing the value of a company that is undervalued despite its strong R&D performance."

The company is confident that this investment will enable it to focus on achieving development milestones for its oncology programs and generating cash flow from potential technology transfers, Nam added.

Despite the investment announcement, Qurient's shares remained unchanged on Monday.

As of the market close, the company's shares stood at 4,540 won, down 0.44 percent from the previous trading day.

Qurient's history until now

Qurient is a biopharmaceutical company founded in 2008, specializing in new drug development. It was launched to commercialize basic research projects by the Korea Pasteur Institute, established under an agreement between the Institut Pasteur in France and the government of Korea.

Listed on the Kosdaq market in 2016, Qurient has built a network of collaborations with world-renowned research institutions, including Germany's Max Planck Institutes. Its key research and development products include the immunotherapy cancer drug Q702, the cancer drug Q901, and the atopic dermatitis treatment Q301.

The company had previously been suspended from trading on the Kosdaq market after the Korea Exchange designated the company as a subject for listing eligibility review in May 2021.

While companies that go public under the special technology system are exempt from minimum sales requirements for five years, they must satisfy the minimum sales requirement of 300 million won in a quarter after the grace period ends.

To resolve the issue, the drugmaker acquired medical supply distribution company H-Pharm in 2021, which led to the KRX holding a corporate review committee and deciding to maintain the listing of Qurient on the tech-heavy Kosdaq market in October of 2022.