This article was published on Feb. 18, 2025, at 2:26 p.m. on the ChosunBiz MoneyMove site.
Curocell, a biotechnology company known for developing immuno-oncology drugs referred to as "dream cancer treatments," is pushing for the issuance of 40 billion won convertible bonds (CB). The aim is to repay the borrowing fund used for building pharmaceutical manufacturing facilities and to accelerate the localization of chimeric antigen receptor T-cell (CAR-T) therapies.
According to the investment banking (IB) industry on the 18th, Curocell has recently decided to issue non-guaranteed, bearer convertible bonds and has begun a demand survey targeting institutional investors. The goal is to issue 40 billion won worth of CBs with a maturity of five years, with Mirae Asset Securities, which previously underwrote the listing, also handling the issuance.
This CB issuance by Curocell is the first since its listing on the KOSDAQ market in November 2023. It appears the company opted for the CB issuance due to rising stock prices, driven by expectations of CAR-T therapy localization. Previously, CBs worth 8.8 billion won issued in March 2023 were fully converted into stocks by the end of last year.
Founded in 2016, Curocell is considered the first domestic pharmaceutical and biotechnology company to develop CAR-T therapies that eliminate cancer cells using immune cells (T-cells) and has submitted its final approval application. In December of last year, the company applied for product approval for "Limcato" (active ingredient: anbalsel) to the Ministry of Food and Drug Safety.
Limcato is a treatment for relapsed or refractory large B-cell lymphoma (LBCL), a type of blood cancer. It has previously demonstrated efficacy in the final results of its Phase 2 clinical trial and was designated as a candidate for the expedited processing system for advanced biopharmaceuticals in August based on the Phase 2 trial results.
As the approval status of Limcato is expected to be determined in the second half of the year, Curocell plans to prioritize repaying about 34.4 billion won in borrowing funds used for building pharmaceutical manufacturing facilities through this CB issuance, thereby reducing interest expense. The company has incurred 1.7 billion won in interest expenses without any revenue.
The company proposed a nominal interest rate of 0% for this CB, while the maturity interest rate is set at 1%. It has been understood that they intend to exclude a repurchasing clause (adjustment of conversion price due to price drops in the market). Although there is a put option allowing early redemption, it can only be requested after two years.
A source in the securities industry said, "From the investors' perspective, they may have to deposit the principal without any revenue for two years in the worst-case scenario, but there is a growing interest in investment demand," adding that "Curocell, being a venture company, is attracting a lot of interest from KOSDAQ venture funds, compounded by the expectations surrounding the approval of Limcato."