Biotech startup Voronoi withdraws IPO plans

South Korea’s biotechnology startup Voronoi Inc. scrapped its plan to go public this month. 

The new drug developer announced Wednesday it had submitted a delisting notice to the Financial Supervisory Service, hit by lackluster investor confidence. 

The decision came after it held a bookbuilding to confirm the public offering price Monday through Tuesday. The process is used in initial public offerings for efficient price discovery where bids are collected from investors at various prices, which could be above or equal to the floor price.

The company explained it failed to meet the special listing requirements, citing worsening stock market conditions related to Russia's invasion of Ukraine.
Investor sentiment in the biotech center has plunged, however, since the SillaJen scandal back in January.

Only a few institutional investors such as the National Pension Service participated in this week’s book building. There were suggestions that matched Voronoi’s floor price but overall participation was too low for the listing to go forward. 

Voronoi decided against drastically lowering the target price in an effort to protect existing investors. 

This is the third time an initial public offering plan has been scrapped in the country; after that of Hyundai Engineering Co. and Daemyoung Energy Co.

GREAT EXPECTATIONS

Since securing 100 billion won ($81 million) in pre-IPO funding, Voronoi was widely thought to become South Korea's next unicorn or a privately held company with a valuation of $1 billion or more. 

Companies such as DS Asset Management, Nice F&I, and ES Investors have participated in pre-IPO. 

In late Jan., the company hoped to raise up to 130 billion won ($108.4 million) through the IPO. 

On the country’s junior Kosdaq, Voronoi scheduled to float 2 million shares at a price between 50,000 won and 65,000 won apiece. The IPO was expected to put its market capitalization at as much as 866.7 billion won.

Korea Investment & Securities Co. and Mirae Asset Securities managed the now-canceled listing.

Industry insiders expect it will take more than a year for Vornoi to attempt getting listed on the junior bourse again. 

Back in 2019, the company tried to public through a special procedure for high tech startups but failed to its technical prowess requirement twice. In order to qualify, it had to receive Levels BBB or above from two independent organizations. 

This year’s IPO was through a special treatment on future unicorns. A startup with market capitalization of 500 billion won or more could apply to get listed on Kosdaq as long as it receives Level A from one of the evaluating agencies.

Founded in 2015, Voronoi specializes in drug designs that develop novel kinase inhibitors and target protein degraders with the aim of treating intractable and rare diseases. 

Kinase plays an important role in the human body, but when the mutation occurs, it can become cancerous. Kinase inhibitors hinder kinases that can be the cause of such diseases.

Write to Ye-Jin Jun at ace@hankyung.com
Jee Abbey Lee edited this article.