Celltrion’s Microbiome Expansion with HEM Pharma Investment

Using an open innovation approach for collaborative strategies in drug development, Celltrion is actively pursuing new investments in the field of microbiomes. The new investment destination is HEM Pharma. Celltrion, in collaboration with KoBioLabs and BioMe, is jointly developing microbiome therapies and securing the next-generation food source, making the background of this investment a subject of interest.

According to the Financial Supervisory Service on November 8th, HEM Pharma decided on November 7th to conduct a third-party allocation capital increase of $3.8 million to raise operating funds. The structure involves issuing common shares of 239,465 shares at $22.00 per share. The three beneficiaries of the third-party allocation are Woori 2022 Scale-Up Fund, Winvest 21 Investment Association, and Celltrion. Woori 2022 Scale-Up Fund receives the most with 143,679 shares, while Winvest 21 Investment Association and Celltrion each receive 47,893 shares. The payment date for the shares is on November 22nd.

While Celltrion's investment in HEM Pharma amounts to only $763,000, it marks a distinct difference when considering the existing collaborative relationships with microbiome companies. Celltrion is actively engaged in the joint development of microbiome therapies with KoBioLabs, LISCure Biosciences, and BioMe in the form of open innovation. On the other hand, their participation in HEM Pharma's paid-in capital increase appears to be a strategic investment (SI).

Previously, as part of its open innovation efforts, Celltrion made equity investments in about three companies, including Abpro in the United States, Iksuda Therapeutics in the United Kingdom, and Pinotbio in South Korea. Abpro focuses on bispecific antibodies, while Iksuda and Pinotbio are developing new drugs with antibody-drug conjugate (ADC) modalities.

In March 2022, Celltrion advanced microbiome therapy development by partnering with Kobio Lab to treat irritable bowel syndrome and atopic dermatitis. In February, they extended their focus to Parkinson's disease by collaborating with LISCure Biosciences. Additionally, in the first half of this year, Celltrion is working with BioMe on microbiome-based treatment for antibiotic-resistant bacterial infections.

HEM Pharma, in which Celltrion recently invested, is a specialized company in the field of microbiome healthcare and novel drug development platforms. Having passed a technical evaluation in September, it is preparing for listing on the KOSDAQ. Founded in 2017, HEM Pharma is led by CEO Joseph Ji, a doctoral graduate in life sciences, and operates with the expertise of CTO Wilhelm Holzapfel, a world-renowned expert in the microbiome field.

HEM Pharma's primary business is divided into two sectors: health functional foods and analysis services, as well as drug development. In the realm of health functional foods and analysis services, they offer personalized microbiome solutions through "my LAB by Nutrilite" and probiotic products such as "Balance Within Immunity."

HEM Pharma is also actively developing microbiome-based therapeutic drugs. The strains relevant to the Live Biotherapeutic Products (LBP) business are 'HEMP-001' and 'HEMP-002,' which are undergoing separate clinical trials in the United States and Australia for depression and Low Anterior Resection Syndrome (LARS), a functional disorder that affects patients who have undergone surgery to preserve the anal sphincter.

In the industry, Celltrion's investment in HEM Pharma is seen as an expansion of the microbiome therapy sector. Furthermore, HEM Pharma's upcoming Initial Public Offering (IPO) and the reception of strategic investment (SI) may positively influence their progress towards listing on the KOSDAQ.