HK inno.N has become the largest shareholder of RaQualia Pharmaceuticals, the Japanese drug development company that originally developed the active ingredient for its flagship product, K-CAB. This strategic acquisition not only strengthens HK inno.N’s pipeline research but also positions the company to benefit from the anticipated launch of P-CAB in the Japanese market.

On March 24, HK inno.N announced an agreement to acquire 2,592,100 shares of RaQualia via a third-party allotment, making it the company’s top shareholder. The acquisition, valued at approximately $68.8 million, is set to be completed on April 18, 2025. This investment secures HK inno.N a 10.61% ownership stake in RaQualia, which originally transferred the technology for K-CAB in 2010.

Founded in 2008 through an employee buyout by former Pfizer Japan researchers, RaQualia reported revenue of $21.3 million and an operating loss of $1.5 million for the first three quarters of 2024. These figures underscore HK inno.N’s purchase as a strategic, low-cost entry into the company.

HK inno.N’s stake in RaQualia is largely driven by its goal of introducing K-CAB (active ingredient: Tegoprazan) into Japan. While Tegoprazan has seen global expansion, it has yet to receive Japanese regulatory approval, delaying the 2024 target contract.

The challenge lies in competing with Takeda’s Takecab, which ranked third among Japan’s medical drugs by 2021 with $758 million in sales. Despite price reductions, Takecab has generated over $6.6 billion in total sales, surpassing Nexium as the top gastrointestinal treatment. HK inno.N has indicated in investor presentations that it aims to enter the Japanese market by the end of 2025, a move that could drive significant growth.

Beyond K-CAB, this investment strengthens HK inno.N’s R&D capabilities by enabling expansion into biologics. RaQualia, an early-stage Japanese biotech venture, is recognized for its technical expertise, particularly following its 2024 acquisition of Fimecs, a Shonan iPark-based biotech startup specializing in targeted protein degradation.

Despite its advanced co-development collaborations with Astellas, Fimecs has underperformed financially, dragging down RaQualia’s stock price. By March 21, 2025, RaQualia’s stock had declined 33.2% year-over-year to $2.72 per share, reflecting a broader pullback in Japanese healthcare investment and prompting the resignation of its former CEO at the end of 2024.

Becoming RaQualia’s largest shareholder grants HK inno.N access to cutting-edge technology and co-development opportunities across RaQualia’s diverse pipeline. This includes candidates targeting acute myeloid leukemia, Alzheimer’s disease, and other indications through mechanisms such as ghrelin receptor agonists, EP4 antagonists, COX-2 inhibitors, P2X7 antagonists, and IRAK-M degraders. Several of these assets already have regional development partnerships with companies like Lilly and Asahi Kasei, presenting an opportunity for adaptation in the Korean market.

RaQualia has stated that proceeds from the share issuance will be directed toward R&D, aligning with HK inno.N’s increasing focus on next-generation biologics, including antibodies, vaccines, and cell- and gene-therapies. HK inno.N’s current discovery-stage molecules are all oncology candidates, suggesting that collaboration with RaQualia could significantly bolster its research capabilities. While details remain undisclosed, an HK inno.N spokesperson affirmed the company’s commitment to maximizing synergies between the two organizations.