Dong-A ST incorporates NeuroBo as subsidiary

Dong-A ST said on Friday that it would acquire American drug company NeuroBo Pharmaceuticals as a subsidiary.

NeuroBo, located in Boston, is a Nasdaq-listed company that develops natural medicines and COVID-19 treatments.

Earlier in September this year, South Korea's pharmaceutical company Dong-A ST transferred exclusive sales rights to NeuroBo for type-2 diabetes and non-alcoholic fatty-liver disease treatment DA-1241 and obesity and non-alcoholic fatty-liver disease treatment DA-1726 across the world excluding Korea.

At that time, Dong-A ST received $22 million as a down payment for technology transfer in the form of convertible preferred shares of NeuroBo, and signed an agreement to acquire a stake by investing an additional $15 million.

In order for the agreement to be valid, NeuroBo had to raise $30 million in funds, including investment from Dong-A ST, and the agreement took effect when the former raised $32.3 million last month.

Afterwards, Dong-A ST converted its preferred shares into common ones at the NeuroBo extraordinary shareholders meeting on Dec. 22, becoming the largest shareholder with a 65.5% stake.

With the proceeds, NeuroBo plans to commence on the multinational clinical phase 2 of DA-1241 within the first quarter of next year and apply for the multinational phase 1 clinical trial of DA-1726.

"We will actively promote collaboration with the world's pharmaceutical companies and biotech ventures through NeuroBo," said an official of Dong-A ST.

"We will continue to strengthen Dong-A Socio Holdings' R&D pipelines and do our best to become a world-class pharmaceutical company beyond Korea," he added.

Write to Jung-Eun Kim at likesmile@hankyung.com