"While Korea excels in research and technology, a 'bottleneck' caused by capital constraints is particularly noticeable when compared to China. We are establishing a 450 billion won fund with the Korea Investment Corporation (KIC) as the anchor investor. We plan to create 'Newco' using the IP of domestic biotech companies to generate high-value-added deals."(Jo Ki-cheol, Senior Managing Director of the Private Equity Division and Head of the Joint Value Creation Division)
CBC Group, which made its mark in the domestic investment industry by leading the acquisition of the aesthetic medical device company Hugel about four years ago, is transforming into the "world’s largest healthcare investment firm" through its merger with GHO Capital. It claims to be the only player capable of covering both the Pacific and Atlantic regions with $21 billion (approximately 32 trillion won) in assets under management (AUM)—the largest among firms investing exclusively in healthcare. In particular, it views the domestic market as a key investment destination.
CBC Group held a press conference on the 10th at the Four Seasons Hotel in Jongno-gu, Seoul, to introduce its plans and vision for the Korean market. E-Daily Premium’s pharmaceutical and biotech platform, Pharm E-Daily, covered the event.
Hugel’s Co-Chairmen of the Board Make an Appearance… CEOs Kyung Han-soo and Cho Ki-chul
CBC Group CEOs Kyung Han-soo and Cho Ki-chul jointly serve as co-chairs of Hugel’s board of directors. CEO Kyung was a key decision-maker in 2021 when CBC Group formed a consortium with GS, IMM, and Mubadala to acquire Hugel.
CEO Kyung is a neurosurgeon who earned his MD from Cornell University. He served as co-founder and managing partner of Potola Capital Partners (2013–2017) and as president of Catalyst Biosciences (2013–2015). He served as CEO of Genexine in Korea (2015–2017) and has been with the CBC Group since 2017.
CEO Cho holds an MBA from the Wharton School at the University of Pennsylvania (UPenn). He served as Head of Asian Healthcare Investment Banking at Citigroup (2011–2018) and as Chief Financial Officer at Zai Lab in Shanghai, China (2018–2023). He joined the CBC Group in 2023.
CEO Kyung stated, “I have been with CBC Group for nine years, making me the second-longest-serving employee. CBC has made a cumulative total of 20 investments exceeding 3 trillion won. Among them, Hugel is our flagship portfolio in Korea.” He added, “Hugel is the largest investment in CBC’s history and our most important portfolio.”
In April 2022, Hugel’s former largest shareholder, Bain Capital, transferred management control to the “Aphrodite Acquisition Consortium”—comprising Singapore’s CBC Group, South Korea’s GS Group and IMM PE, and the Middle Eastern Mubadala Group—for a total of 5,566,791 shares (44.19%), including convertible bonds, at approximately 280,000 won per share, amounting to 1.5587 trillion won. As of the end of March this year, the Aphrodite Acquisition Consortium held 43.53% of Hugel. Breaking down the consortium’s structure, CBC Group holds 18.33% of Hugel, GS Group holds 11.46%, IMM holds 6.88%, and Mubadala holds 6.87%.
Hugel currently has a market capitalization of 3 trillion won on the KOSDAQ market. When asked by a reporter about plans or timing for the sale of Hugel, CEO Kyung stated, “Hugel is on the path to becoming a global company,” indicating that a sale would be premature until sufficient profits are realized.
CEO Kyung said, “We have recruited excellent management, including Carrie Strom as Global CEO and Jang Doo-hyun as Domestic CEO, and I believe these experienced leaders will steer Hugel well. Hugel is now preparing to sell directly in the U.S., and our focus remains on continuing to grow the company.” Regarding additional bolt-on mergers and acquisitions, he said, “That is a matter Hugel must address directly. As the company grows, there will be both organic and inorganic paths, and I understand we are reviewing many opportunities.”
Cumulative investment of 1 trillion won in Korea… 'An important market'
In addition to the investment in Hugel, CBC Group’s major investments in Korea include the $200 million (approximately 300 billion won) acquisition of Celltrion’s Southeast Asian portfolio, as well as the $100 million (approximately 150 billion won) technology licensing of ABL Bio’s bispecific antibody by NovaBridge (formerly iMap), a CBC Group portfolio company.
CEO Kyung stated, “Including investments made jointly with other firms, we have invested $1.5 billion (approximately 2.3 trillion won) in the domestic market, and CBC Group alone has invested nearly 1 trillion won,” adding, “There are many details we have not disclosed yet, and some will be announced soon.”
The CBC Group is currently establishing a $300 million (approximately 450 billion won) fund with the Korea Investment Corporation (KIC). Global strategic investors (SIs) have also been lined up, and the group expects to complete the first closing this summer with approximately $200 million. A number of investment targets have already been shortlisted in preparation for the first closing.
Specifically, the plan is to establish a “newco” by acquiring intellectual property (IP) from domestic biotech companies. A “newco” refers to a “project-based” biotech company established to rapidly develop and commercialize a specific new drug candidate. While this business model is already well-established in the U.S., it has only recently gained recognition in Korea. For example, Korea’s #DNDPharmatech transferred technology for an obesity drug candidate to the U.S. N-co Metcera, and it became a hot topic when Metcera was acquired by the big pharma company Pfizer for approximately 15 trillion won at the end of last year.
CEO Kyung believes that by establishing Newcore and acquiring core IP, the CBC Group can easily connect companies with the right development talent—those with 20 to 30 years of experience—by leveraging its global network.
CEO Kyung stated, “Our strategy is simple. First, we globalize small and medium-sized enterprises (SMEs). Second, we acquire one of the many companies within a large conglomerate and establish it as an independent entity. Third, we acquire and merge numerous small companies within the market. In Korea, we are implementing the globalization strategy among these three.”
He added, “Healthcare is a field that requires a comprehensive understanding of regulations, science, business models, and country-specific dynamics,” noting that “CBC is the only entity capable of providing end-to-end support throughout this process.”
CEO Kyung stated, “CBC is Asia’s largest healthcare investment firm headquartered in Singapore, and through its merger with GHO Capital—Europe’s largest healthcare-focused investment firm—the world’s largest investment firm dedicated to healthcare will be born.” He added, “Among other private equity firms and investment companies, there aren’t many funds that invest exclusively in healthcare. Since diseases know no borders, we are investing globally rather than focusing on just one country."
The merger between CBC Group and GHO is expected to be finalized early next year.
at one-tenth of China’s level… Significant upside
One reason for closely watching Korea is the undervalued deal pipeline compared to China.
CEO Cho remarked, “While Korea has strong biotech research and technological capabilities, ‘bottlenecks’ occur during the investment and clinical trial phases. It is regrettable that companies opt for early technology transfers due to insufficient funding.” He added, “In contrast, China has the financial capacity to advance development further, allowing for larger deal sizes. On average, Chinese companies secure approximately 350 to 400 billion won in cash alone as upfront payments for technology transfers.”
This figure certainly contrasts with recent deals, such as #Oscotec’s technology transfer of Sebidoplenib to Azios, which yielded an upfront payment of 37 billion won, and #HanmiPharma’s transfer of Sonepeglutide to Eli Lilly, which brought in 112.9 billion won.
CEO Cho remarked, “If we join forces to develop the drug through Phase 1 and 2 clinical trials, we can amplify its value. I want to address the disparity where the scale of deals in China is ten times larger than those in Korea.”
CEO Cho added, “When investing in biotech, I believe the most important factor besides science is the market where the product will be commercialized. If you examine what Big Pharma’s portfolio needs are, the big picture begins to emerge. It’s essentially matchmaking from a global perspective.” He further stated, “We plan to seek opportunities across major therapeutic areas, including oncology, neurological diseases, immune and inflammatory diseases, and ophthalmic diseases.”
He noted, “We are sourcing deals through direct networking at various events,” adding, “Our domestic office currently has two executive vice presidents and two department heads, and we are actively hiring additional staff.”
