US affiliate of Korea's cell therapy company NK Max eyes NYSE listing in 3Q

NKGen Biotech, the US affiliate of South Korea's natural killer (NK) cell therapy developer NK Max, on Friday said it signed a letter of intent (LOI) on a merger with an American special purpose acquisition company (SPAC) listed on the New York Stock Exchange (NYSE).

The merger's purpose is to obtain backdoor listing on the NYSE through the SPAC. NKGen Biotech seeks to complete the main contract for the move as early as this month and start trading on the exchange from the third quarter.

NKGen Biotech will be South Korea's first bio venture to get listed on the NYSE.

The merger will be with Graf Acquisition Corp., whose market capitalization is $217.9 million (280 billion won). During the merger promotion process, SPAC investors have the option of withdrawing their funds.

Graf CEO James Graf, a longtime player on the US SPAC market, led the now-defunct Graf Industrial's merger with the sensor manufacturer Velodyne, which is now Velodyne Lidar.

Based in Santa Ana, California, NKGen Biotech has an annual capacity to produce 3,000 doses of NK cell therapy.

Through this merger, the company expects to secure funds for expansion that will also have the effect of improving its financial structure.

"The entire amount loaned by NK Max to its US subsidiary has been written off as an impairment loss since the possibility of recovery is deemed low," an NKGen Biotech source said. "If capital is raised through a merger with the SPAC, part of the impairment loss can be reversed in accounting and greatly improve financial structure."

"Completion of the listing in the US will make collaboration with global pharmaceutical companies easy," an NK Max source added. "We expect clinical development to further accelerate."

Write to Jae-Young Han at jyhan@hankyung.com