[Edaily Reporter YU JIN-HEE ] Dasan Pharmaceutical, a contract development and manufacturing organization (CDMO) specializing in pharmaceuticals that is celebrating its 30th anniversary, has completed all regulatory and managerial preparations for its KOSDAQ listing and has entered the final countdown to going public. After carrying out a voluntary 100-to-1 stock split to meet the share dispersion requirements essential for listing, the company has proactively established a corporate governance system that exceeds the standards required by the Korea Exchange, laying the groundwork to clear the listing hurdle in one fell swoop.

100-to-1 Stock Split Meets Share Dispersion Requirements… Maximizing Liquidity Without Diluting Shareholder Value

According to sources in the pharmaceutical, biotech, and investment banking (IB) industries on the 26th, Dasan Pharmaceutical carried out a 100-to-1 stock split to proactively meet all requirements for a KOSDAQ listing. Dasan Pharmaceutical’s total number of issued shares was previously only 112,000, making it difficult to meet the stock distribution criteria stipulated by the exchange—namely, “minority shareholders holding at least 25% of shares” and “at least 10% of shares offered in a public offering.”

While some expressed concerns about a potential optical illusion caused by the downward adjustment of the par value, Dasan Pharmaceutical explained that this was a strategic decision to meet listing requirements, not a result of corporate financial distress leading to a stock price decline. Since the number of shares increased exactly 100-fold in proportion to existing ownership stakes through the stock split, there is absolutely no dilution of the equity value for existing shareholders. Rather, the company aimed to lower the purchase price per share, thereby significantly reducing barriers to entry for general retail investors upon future listing and maximizing the liquidity of shares in circulation.

Currently, Dasan Pharmaceutical’s ownership structure forms a stable framework, consisting of 80.0% held by the largest shareholder and related parties, 14.2% in treasury stock, and 5.8% held by investment funds from KB Securities and NH Investment & Securities that participated in the pre-IPO round. Last December, Dasan Pharmaceutical successfully concluded a 13 billion won pre-IPO funding round, thereby objectively validating its corporate value and business viability to institutional investors.

Ahead of its KOSDAQ listing, Dasan Pharmaceutical has established a sophisticated corporate governance system on par with that of listed companies and has begun full-scale operations. The company proactively established a Transparency Management Committee and an independent Audit Committee—features rarely seen among unlisted pharmaceutical companies—and introduced the Korean Sarbanes-Oxley Act (K-SOX) to elevate accounting transparency and operational risk management capabilities to the highest level.

Furthermore, to innovate its management system, the company has implemented four key initiatives across all aspects of its operations: strengthening job-specific expertise among core personnel; upgrading its next-generation Enterprise Resource Planning (ERP) system; standardizing data and introducing an artificial intelligence (AI)-based workflow system; and establishing an Environmental, Social, and Governance (ESG) management framework.

As the Korea Exchange (KRX) has recently been strictly scrutinizing the accounting transparency, board independence, and safeguards against embezzlement and breach of trust of unlisted companies, the internal control system established by Dasan Pharmaceutical is expected to serve as a key asset in securing preliminary review approval.

Revenue Doubles in Four Years to Exceed 106.9 Billion Won… Solid Profitability Proven by the “Numbers”

Dasan Pharmaceutical’s greatest strength is its “profitability,” which sets it apart from typical biotech startups. Annual revenue, which stood at 51.9 billion won in 2021, surged more than twofold to 106.9 billion won last year—marking the company’s first entry into the “100-billion-won revenue club” since its founding. During the same period, operating profit also surpassed 10 billion won for the first time in history, demonstrating robust profitability. This year, the company is targeting over 130 billion won.

These solid results stem from the company’s unrivaled position in the domestic active pharmaceutical ingredient (API) and contract manufacturing organization (CMO) markets. Dasan Pharmaceutical has secured business relationships with over 100 major domestic pharmaceutical companies and has established a solid foundation for cash generation by capturing a 40% market share in urological treatments, 27% in antihypertensives, 11% in bronchitis treatments, and 9% in central nervous system (CNS) treatments within the domestic contract manufacturing market. The company’s robust financial performance is underpinned by its advanced formulation design capabilities, developed by allocating approximately 30% of its total workforce to research and development (R&D) specialists.

The key point of interest for the market and investors following Dasan Pharmaceutical’s IPO is the “expansion potential of its global technology-driven CDMO business.” Moving beyond simple contract manufacturing of finished products, Dasan Pharmaceutical is accelerating its expansion into the global market armed with drug delivery system (DDS)-based particle control technology.

The Japanese market represents the biggest turning point for global commercialization. Dasan Pharmaceutical successfully completed a rigorous on-site inspection by Japan’s Pharmaceutical and Medical Devices Agency (PMDA) at its Asan plant in South Chungcheong Province and recently received final approval of compliance. The PMDA is regarded as one of the most stringent regulatory agencies—alongside the U.S. Food and Drug Administration (FDA) and the European Medicines Agency (EMA)—when it comes to data integrity standards. Very few domestic pharmaceutical companies—fewer than one can count on one hand—have passed a PMDA inspection in the finished pharmaceutical products sector.

With this PMDA approval, Dasan Pharmaceutical has not only secured the ability to expand exports to Japan of duloxetine hydrochloride pellets—produced using its proprietary fluidized-bed coating technology—but has also fully met the requirements for the official launch in Japan of its next-generation antidepressant, venlafaxine pellets. In particular, through a strategic supply agreement with Kyowa Pharmaceutical Co., Ltd.—founded in 1954 and possessing a strong sales network in the local CNS market—sales of finished products to Japan are expected to surge starting next year.

Efforts to establish a foothold in the Chinese market are also bearing fruit. With the commencement of operations at the joint venture Heida San Pharmaceutical Co., Ltd. (HDP) plant—built on an 85,950-square-meter site in Anhui Province, China—annual production capacity has expanded dramatically from 800 million tablets to a maximum of 5 billion tablets.

In addition, the company has signed the “28th Investment Agreement” with Suwon Special Self-Governing City and is moving forward with plans to expand its R&D center on a large scale in conjunction with the Gwanggyo Techno Valley bio-ecosystem. The funds raised through the initial public offering will be primarily invested in expanding the Suwon research facility and developing long-acting injectables based on microfluidic technology, a controlled-release drug delivery system (DDS) platform, and a new drug candidate—a PCSK9-inhibiting antibody-oligonucleotide conjugate (Gapmer ASO) targeting hyperlipidemia—which is a project supported by the Ministry of Health and Welfare.

Hong Soon-jae, CEO of Biobook, stated, “Dasan Pharmaceutical is an exemplary candidate for listing, having fully met all the criteria the stock exchange considers most important in its listing review: profitability, financial stability, and a transparent governance system.” He added, “Once global CDMO export results begin to be reflected in the company’s financial statements following PMDA approval and the commencement of operations at the Chinese plant, the revaluation of the company’s market value will accelerate after the listing.”