[Edaily Reporter Shin Min-jun] #Huons Group has embarked on a strategy to strengthen its business competitiveness through unified management by implementing organizational restructuring, acquisitions, and intra-group mergers. This move is drawing attention as it goes beyond a simple reorganization of affiliates; it is a strategic initiative to concentrate core business capabilities centered on pharmaceuticals and biotechnology and to efficiently reallocate management resources within the group.

Huons Group is laying the foundation for future growth by organically integrating the full lifecycle of the pharmaceutical industry—including research and development (R&D), production, and distribution. In particular, the decision to equip the group with biotechnology as a powerful growth engine is being viewed as a decisive structural overhaul to respond to the rapidly changing global pharmaceutical landscape. This aligns with Huons Group’s growth strategy, which has sustained a steady upward trend in performance through repeated acquisitions and mergers.

The restructuring of Huons, a core subsidiary of Huons Group, began last year with the spin-off of its health functional food business division. Huons Group enhanced business expertise by spinning off the health functional food division from the existing Huons and launching the integrated entity Huons N. Huons has been reborn as a pharmaceutical-focused company. Subsequently, Huons N internalized its production capabilities by merging with BioRoget, its contract manufacturing subsidiary. By integrating the planning, distribution, and production of the health functional food business into a single system, the group is strengthening operational efficiency.

Last April, Huons decided to merge with its wholly-owned subsidiary, Huons Life Science. Huons Life Science, a manufacturer and distributor of finished pharmaceutical products, was acquired in 2023. Through the merger of the two companies, the Huons Group aims to unify its pharmaceutical business and improve operational efficiency.

Huons has also decided to merge with its affiliate, Huons Lab, marking the start of a full-scale expansion of its biopharmaceutical business. Huons Lab is an R&D-focused company possessing core technologies in peptides and novel biopharmaceuticals, and Huons will absorb its biopharmaceutical R&D capabilities. Industry observers in the pharmaceutical and biotech sectors believe that once the merger is complete, the addition of biopharmaceutical capabilities to the company’s existing structure—which centers on prescription drugs—will further strengthen its foundation for mid- to long-term growth.

The signing of a vaccine distribution agreement with a global pharmaceutical company last March and the establishment of a new vaccine division can also be viewed as cornerstones for solidifying its biopharmaceutical capabilities. By taking on the domestic distribution of a total of five vaccine types and leveraging its existing pharmaceutical sales and distribution network to enter the vaccine market, the company has embarked on diversifying its portfolio.

The pharmaceutical and biotech industry interprets Huons’ recent moves as a strategy of “selection and concentration.” The company is clearly restructuring its business by spinning off its health food division into a separate specialized entity and consolidating its pharmaceutical and biotech sectors around Huons, its core operating company. In particular, by integrating R&D and production functions that were previously scattered across the group, the company expects to accelerate decision-making and reduce duplicate costs.

This restructuring is also aligned with recent changes in the external environment. As the global pharmaceutical and biotech industry is realigning itself around high-value-added biopharmaceuticals, securing R&D efficiency and production competitiveness has emerged as a key challenge for domestic pharmaceutical companies as well. Huons is also securing future growth engines by expanding its business scope beyond its existing synthetic drug-centered structure into the biopharmaceutical and vaccine sectors.

Huons views this merger as an inevitable strategy for survival. The company believes it will not only strengthen its R&D capabilities but also gain the competitiveness needed to prepare for reforms to the drug pricing system. According to recent policy documents, companies designated as “semi-innovative” or “innovative” pharmaceutical firms are granted drug price benefits for up to four years: 47% and 49% for existing generics, and 50% and 60% for new generics, respectively.

To meet the innovation criteria required for designation as an “innovative pharmaceutical company,” the addition of a biotech platform and pipeline—rather than relying solely on existing generic synthetic drugs—is expected to work in Huons’ favor in the selection process. The merger with Huons Lab is also essential for Huons.

Huons Lab possesses innovative core technologies, such as a formulation modification platform utilizing human-derived hyaluronidase. Currently, Huons Lab lacks revenue-generating capabilities, and with an initial public offering (IPO) becoming difficult due to financial authorities’ policy prohibiting dual listings, attracting external investment is challenging. Through the merger, Huons Lab will be able to secure the stable funding necessary to reach its future goal of technology transfer.

In particular, this absorption merger is considered a key element of the group-wide restructuring that Huons, Huons Lab, and, by extension, the Huons Group have been pursuing to lay the foundation for future growth. Not only Huons and Huons Lab but also Huons Global, the holding company of the Huons Group, formed separate special committees to conduct independent reviews.

Huons Global has decided to seek the opinions of its shareholders regarding the merger of its subsidiaries at an extraordinary general meeting of shareholders next month. Prior to this, the company also proposed a shareholder return plan for Huons Global shareholders, under which a portion of the new shares to be received by the company following the merger would be distributed as a stock dividend exclusively to general shareholders.

These moves by the Huons Group are interpreted as a strategic move to lay a solid foundation for medium- to long-term sustainable growth rather than focusing on short-term growth.

An official in the pharmaceutical and biotech industry said, “There is great interest in what results this strategy—which strengthens expertise in each business segment while reintegrating core areas to maximize synergies—will yield in the future.”