Genome & Co acquires US firm to enter CDMO business

Invested ₩30 billion in self-funds…acquires management rights in the San Jose-based List Labs

Covers microbiome R&D to manufacturing… reveals its ambition to “to rise to become a global pharmaceutical company”

The KOSDAQ listed Genome & Company has acquired a manufacturing facility in the US to enter the microbiome contract development and manufacturing organization (CDMO) business.

 

Through the acquire, the company aims to rise to a leader in both R&D and production in the microbiome market, a field with high growth potential.

 

On the 8th, Genome & Company announced that it had acquired 966,502 shares of List Labs in the US in cash.

 

This is equivalent to 27.17% of the company’s net worth.

 

To internalize the production of microbiome treatment and diversify the company’s business, Genome & Company acquired 60% of List Lab’s shares and became the major shareholder of List Labs Genome & Company is a biotech company that specializes in new drug development.

 

It was listed on KOSDAQ in December last year.

 

The company has been using microbiomes to develop immunotherapy drugs for cancer and treatment for autism, as well as new antibody therapies.

 

List Lab is a specialized CDMO business with 43 years of history.

 

It owns a 2498m² sized FDA cGMP certified facility in San Jose, California that produces consigned microbiomes and biotoxins.

 

The company had accrued an average of $9.7 million in sales annually.

 

The company’s operation of 7 independent manufacturing spaces within the facility was positively reviewed as it allows separate production of aerobic and anaerobic microbiome-based drugs.

 

List Labs’ manufacturing facility (Source: Genome & Company)

Genome & Company’s management held an online discussion session to explain the company’s mid-to-long term vision regarding its entry into the new business area.

 

By incorporating List Labs as the company’s subsidiary, the company aims to internalize the production of its self-developed microbiome pipeline and more stably operate clinical trials.

 

Even after acquiring the management rights, the management said that List Lab will maintain its independent operations but expand new production facilities to increase the size of the business.

 

The company plans to become a global microbiome CDMO leader by expanding its business area from the existing model that focused on early-phase clinical trials to late-phase clinical trials and consignment production for commercial use.

 

The company also mentioned that it is considering listing Lists Lab on NASDAQ or other markets after the global CDMO business is in place.

 

Microbiomes refer to a community of microorganisms.

 

With increasing interest and attempts to affect the creation of the microbial environment for use in rare disease and cancer treatment, the microbiome industry has emerged into a blue ocean in the field of new drug development.

 

Genome & Company expects the demand for production capacity to rise steadily in line with the continued rapid growth of the microbiome treatment market.

 

According to the Ministry of Food and Drug Safety data, 204 microbiome treatments are currently being developed worldwide.

 

The market size is expected to increase approximately 167 times, from $56.3 million(₩62.4 billion) in 2018 to $9.38 billion (₩10.87 trillion) in 2024.

 

Jisoo Pae, CEO of Genome & Company who attended the session said, “Success of a microbiome-based new drug development depends on its prompt release and market preoccupation.

 

I believe securing a CDMO will become an important factor for success in the microbiome market," He also expressed his expectations that the company’s entry into the microbiome CDMO business will add a new profit model to the company, increasing the speed of new drug development, and ultimately push the company up to a ‘first-mover’ in the global microbiome industry.

 

Genome & Company’s microbiome CDMO project plan (Source: Genome & Company)

The management had stressed that the ₩30 billion paid out in the acquisition process was 100% self-funded.

 

The company does not plan to receive investment from external institutional investors nor intend to issue new shares.

 

Pae emphasized, “The few media reports that Genome & Company plans to make paid-in capital increases because of the acquisition are not true.

 

However, we may need to attract investment to expand the factory in the U.S.

 

However, we will be attracting investments around List Labs and the U.S.

 

subsidiary, therefore the HQ’s equity will not be affected or diluted in any way.”