This article was published on March 10, 2025, at 5:22 p.m. on the ChosunBiz MoneyMove site.
Biotech Genosco, which has embarked on the challenge of listing on the KOSDAQ, has hit a hurdle in the examination threshold of the Korea Exchange. The push for Genosco's listing has sparked backlash from shareholders of its parent company, Oscotec.
It has been reported that Genosco has not received a conclusion such as 'approval' in its preliminary listing review application for nearly five months. The exchange has effectively decided on 'disapproval,' indicating it is waiting for the company to 'voluntarily withdraw' its application.
According to the financial investment industry on the 10th, Genosco's preliminary examination has remained in a 'application received' status for about 139 days since its application in October last year. It has been identified as the longest ongoing review among 27 companies currently under examination by the exchange.
Previously, in April last year, Genosco intensified its listing challenge after receiving AA ratings in its technology evaluation. Genosco is the company that developed 'RAY,' the main ingredient of the lung cancer treatment drug 'Lecoza' created by Yuhan Corporation, and the goal of this listing was to secure funding for the development of the second and third generations of RAY.
Initially, the market projected that Genosco's examination by the exchange would not exceed four months. This was due to the exchange focusing on shortening examination periods by establishing a dedicated review system, independent of the stringent standards applied to biotechs undergoing technology-specific listings.
In fact, the time taken from the application for preliminary examination to the result (including withdrawal) last year was approximately 89 days, which is a significant reduction compared to 119 days the previous year. Notably, the biotech Orum Therapeutics, which applied for preliminary examination by emphasizing the achievement of technology transfer of candidate substances like Genosco, received the review approval result in just over three months.
It has been identified that overlapping revenues with its parent company, Oscotec, have led to delays in Genosco's review process. Genosco, headquartered in Boston, U.S., went through its parent company, Oscotec, in the process of transferring the new drug substance RAY to Yuhan Corporation in 2015, and it shares revenue with Oscotec.
According to the pharmaceutical industry, the revenue from Lecoza's sales is divided among Janssen, Yuhan Corporation, Genosco, and Oscotec. When Janssen deducts revenue from Lecoza and allocates it to Yuhan Corporation, Yuhan Corporation retains 60% of the revenue, while the remaining 40% is shared equally between Oscotec and Genosco.
It has been assessed that the exchange raised concerns over Oscotec and Genosco having essentially the same revenue structure. Oscotec initially listed by highlighting its dental bone graft business but now derives about 90% of its revenue from RAY's technology transfer profits. Genosco is at 100%.
A source in the securities industry noted, 'If Genosco goes public, it means that two companies operating in exactly the same business with similar products will be listed in the same market.' They added, 'Most importantly, these companies are in a parent-subsidiary relationship, with Oscotec holding 59% equity in Genosco.'
The backlash from small shareholders of Oscotec is also considered a burden for the exchange. Small shareholders criticize Oscotec's listing of Genosco as a 'split listing,' arguing that the listing of a subsidiary generating revenue from the same product could harm shareholder value, signaling actions for changing representatives.
Some analysts have suggested that the exchange is inducing withdrawals through delayed reviews. The exchange officially allows companies to voluntarily withdraw their applications before announcing disapproval. This decision is aimed at facilitating future listing challenges rather than outright disapproval.
Meanwhile, according to the exchange, nine companies, including DB Financial Special Purpose Acquisition Company No. 14, AIMMO, ARRNN, Vision Science, REMEDI, Youngkwang YKMC, Merlot Lab, REDNVIA, and AmtixBio, withdrew from their preliminary reviews last month. All of these companies chose to voluntarily withdraw their applications before receiving disapproval notice from the exchange.