Peter Thiel-backed D&D Pharmatech gets preliminary nod for IPO

South Korean clinical-stage biotech D&D Pharmatech Inc. has won approval from the Korea Exchange’s preliminary review for listing on the junior bourse Kosdaq, the stock exchange operator said on Friday.  

Established in 2014, the biotech focuses on treatment of neurodegenerative diseases, molecular imaging and radiotherapy, diagnostics, fibrotic diseases and metabolic disorders.

The new drug developer was founded by Seulki Lee, associate professor at The Johns Hopkins University School of Medicine in Baltimore, Maryland. It has secured a combined 219 billion won ($168.2 million) in three funding rounds, of which 57 billion won came from Octave Life Sciences Ltd. founded by PayPal co-founder Peter Andreas Thiel.

Other investors include local venture capital firms like Smilegate Investment Inc., Intervest Co., LB Investment Inc., Magna Investment Co. and Seoul-based fund manager DS Asset Management Co.

It is the biotech’s third attempt for an initial public offering on the local stock market. The company filed a preliminary review application for listing in October 2020 but failed in February 2021. It retried the IPO process in 2021 and received a non-approval notification again in July 2022.

The KRX’s decision was based on the difficulty in proving the efficacy of its core pipeline, candidates for Parkinson’s and Alzheimer’s disease treatment.

In March of this year, the biotech said its candidate NLY01 didn’t reach statistical significance from phase 2 clinical trials on patients with early, untreated Parkinson’s disease, conducted in the US and Canada.

The biotech is focusing on phase 1 clinical trials of DD01, targeting obesity, diabetes and nonalcoholic steatohepatitis (NASH).

D&D’s corporate value, estimated at more than 1 trillion won in late 2021, has plunged due to a series of IPO failures. Market speculators say the company will be valued at 300 billion-400 billion won if it goes public next year.

The biotech’s revenue dropped 55% on-year to 610.6 million won last year; the operating loss was 68.7 billion won last year, similar to the 75.7 billion won shortfall in 2021.

Write to Ye-Jin Jun at ace@hankyung.com

Jihyun Kim edited this article.