[Edaily Reporter YU JIN-HEE ] Foreign investors are flocking to the new drug developer EyeGene,Inc(185490)as the perception that the company is undervalued continues to spread. Even as foreign investors sold off shares across the KOSDAQ market to lock in profits, EyeGene,Inc was the only company to continue seeing net foreign buying. Coupled with large-scale on-market purchases by management during a period when the stock price was trending downward, observers predict that the company’s undervaluation will be resolved as a full-scale earnings turnaround becomes visible, starting with the export approval for its recombinant botulinum toxin in the second half of the year.

Cash reserves alone total 38 billion won, with net cash accounting for 54% of market capitalization... CEO also increases stake

According to the Korea Exchange on the 6th, foreign investors recorded net sales of approximately 298 billion won across the entire KOSDAQ market on the 5th. In contrast, foreign investors continued their streak of net buying in EyeGene,Inc. for the sixth consecutive trading day. On the 5th, EyeGene,Inc.’s stock price closed at 1,630 won, up 4.49% (70 won) from the previous day, settling firmly above the 1,600-won mark. Its market capitalization also surpassed 70 billion won.

Of particular note is the CEO’s aggressive stock purchases. According to the Financial Supervisory Service’s electronic disclosure system, Choi Seok-geun, CEO of EyeGene,Inc., purchased the company’s common stock on the open market over four trading days from the 28th to the 31st of last month. The purchase price ranged from 1,495 won on the 28th to 1,408 won on the 31st. In effect, he actively bought shares during a downtrend rather than a rising market.

Through this purchase, CEO Choi invested approximately 187 million won, increasing his holdings from 72,011 shares to 200,000 shares. This move is interpreted as reflecting not merely a defensive measure to prop up the stock price, but also his confidence in the company’s upcoming earnings inflection point and management performance.

This move also aligns with the trend toward responsible management evident across the pharmaceutical and biotech sectors. Kim Yong-ju, Chairman of #LigaChem Biosciences, acquired 17,700 shares on the 4th of this month. CEO Choi Ho-il of Peptron, Inc.(087010) also purchased 10,000 shares last month. In tandem with this, the Korea Exchange (KRX) Healthcare Index has recently resumed an upward trend. The securities industry interprets this as a result of bargain-hunting following the materialization of many of the negative events the market had been concerned about.

The key reason the securities industry views EyeGene,Inc’s stock price as severely undervalued is the gap between its cash holdings and market capitalization. According to CEO Choi, EyeGene,Inc’s current available funds stand at approximately 38 billion won. Based on the closing price on the 5th (1,630 won), EyeGene,Inc’s market capitalization is about 70.5 billion won. This means that 53.9%—more than half—of the company’s market capitalization consists of net cash assets. These robust cash assets are forming a support level against further declines. Furthermore, it is anticipated that the perception of undervaluation will strengthen even further once royalty and toxin sales begin flowing in starting in the second half of the year.

Earnings to Reflect Export Approval for Next-Generation Toxin ‘EG-rBTX100’ and More

Starting in the second half of the year, EyeGene,Inc.’s efforts to date will begin to show in its financial results. The most advanced product in its pipeline is “EG-rBTX100,” a recombinant botulinum toxin product. EyeGene,Inc. plans to apply for an export license for EG-rBTX100 with the Ministry of Food and Drug Safety this month. Considering that the review process typically takes about three months, approval is highly likely before the end of the year.

EG CORPORATION produces rBTX100 using genetic recombination technology to extract the toxin from existing botulinum strains. It is a next-generation toxin product designed and manufactured by EG CORPORATION. The key functional domains of botulinum toxin types A1, A2, and A6 have been combined to optimize the product. Since it does not use toxins derived from wild-type strains, it is free from the controversies over strain origins and patent disputes that have been the Achilles’ heel of the existing toxin industry.

Its distinct efficacy, proven in preclinical trials, is also well-established. Compared to existing toxin formulations, it has a faster onset of action and a longer duration of efficacy. It also offers the production consistency and cost competitiveness characteristic of recombinant protein manufacturing.

Building on the export license granted by the Ministry of Food and Drug Safety (MFDS), EyeGene,Inc is moving forward with identifying overseas partners and initiating formal exports. Obtaining an export license is an essential step that officially certifies to the government the company’s ability to ensure stable production under an excellent Good Manufacturing Practice (GMP) system. Following validation of the manufacturing processes for the bulk drug substance and finished product, as well as quality control (QC) reviews, the company will begin exports next year. EyeGene,Inc. has set a target of 10 to 20 billion won in annual sales from the toxin alone.

Through collaboration with Korea BMI, which became its largest shareholder in 2023, EyeGene,Inc has also overcome the limitations of being a research-focused biotech company. Korea BMI possesses the infrastructure and distribution network to mass-produce toxins, specialty pharmaceuticals, and medical devices at its GMP facilities in Jeju and Osong, North Chungcheong Province. This means the company has established a structure to directly manufacture and sell its products using this production infrastructure.

The 4-valent meningococcal conjugate vaccine “EG-MCV4” has completed Phase 2 clinical trials and is currently in the process of preparing the final clinical study report (CSR). The company plans to finalize the report within the third quarter and begin Phase 3 clinical trials in the fourth quarter. After obtaining marketing authorization by the end of next year, it will enter the domestic military procurement market in 2028. The company intends to enhance its financial stability by securing a reliable government-to-government (B2G) demand through the military procurement market. Subsequently, in 2029, it will expand its reach to the Pan American Health Organization (PAHO) and Southeast Asian markets.

Immediate cash inflows are also set to begin. During the third quarter, an eye-corner wrinkle treatment developed by Korea BMI and co-developed by EyeGene,Inc. will be launched in South Korea. EyeGene,Inc. will receive a certain percentage of sales revenue as royalties.

Successes are also mounting in the messenger ribonucleic acid (mRNA) platform. The company was simultaneously selected for two national R&D projects by the Korea Disease Control and Prevention Agency (KDCA) to develop vaccines for Hantavirus and Severe Fever with Thrombocytopenia Syndrome (SFTS). This recognition reflects the company’s proprietary “end-to-end” platform capabilities, which span from candidate design to the development of quality control (QC) analytical methods, preclinical testing, and integration with contract development and manufacturing (CDMO) processes.

The hantavirus vaccine, being jointly developed with a research team at Korea University, utilizes cap-dependent self-amplifying RNA technology. By introducing a Lariat cap-forming sequence into the 3′ UTR region, the company has enhanced RNA stability and antigen expression efficiency. This overcomes the shortcomings of existing inactivated vaccines, such as a short duration of immunity and a lack of adaptability to variants. By applying MediciBio’s proprietary lipid nanoparticle (LNP) delivery technology, the company has also circumvented overseas patent barriers (FTO).

Development of adeno-associated virus (AAV)-based gene therapies (for age-related macular degeneration and diabetic retinopathy) is also gaining momentum. Following efficacy evaluations in non-human primates and process validation this year, the company plans to complete preclinical trials next year. The strategy is to enter Phase 1/2a clinical trials in 2028 and secure a global technology license-out (L/O) deal in 2029.

An EyeGene,Inc official stated, “We are proceeding as planned with the application for a toxin export license in the third quarter and the administration of the Phase 3 clinical trial for the meningococcal vaccine in the fourth quarter,” adding, “We will adhere to the proposed schedule to accelerate the transition to a revenue-generating business model.”