Korea / Special Situations, Clepsydra Capital

Sanghyun Park

Korea / Special Situations

Equity Capital Markets

Kolon TissueGene  / Equity Capital Markets

What is Korea's hottest stock now? I guess many investors will have <a href="https://www.smartkarma.com/entities/22838" target="_blank" data-smartkarma-citation="entities:22838:1">SillaJen, Inc. (0908477D KS)</a> in their mind when asked this question. SillaJen's YTD return is a whopping 217%. Now, we have another SillaJen-like company that is about to test Korea's IPO market. It is <a href="https://www.smartkarma.com/entities/25907" target="_blank" data-smartkarma-citation="entities:25907:1">TissueGene Inc. (950160 KS)</a>. The company is actually based in Maryland, US. But this is a direct subsidiary of one of Korea's conglomerates named 'Kolon Group'. <a href="https://www.smartkarma.com/entities/9914" target="_blank" data-smartkarma-citation="entities:9914:1">Kolon Corp (002020 KS)</a> owns a 31.16% stake. In addition, Kolon Corp's largest single shareholder and Kolon Group chairman Lee Woong-ryeol owns a 20.38% stake. Another Kolon affiliate company called <a href="https://www.smartkarma.com/entities/4805" target="_blank" data-smartkarma-citation="entities:4805:1">Kolon Life Science Inc (102940 KS)</a> owns a 14.37% stake. So, Kolon Group currently controls a total of 71.13% stake in TissueGene.So, what does exactly this company do?Founded in 1999, the company basically develops medicines for the treatment of various orthopedic disorders (also called osteoarthritis or simply OA).<div class="content-caption">(Osteoarthritis - The photo below is taken from TissueGene's corporate website)</div><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/034/068/original/2.png?1505986750" class="editor-image img-responsive" data-smartkarma-image-id="34068"></figure>Then, what's so special about this company?Well, TissueGene's approach is a bit unique and different. The company employs a form of cell therapy to deliver therapeutic proteins directly to localized areas of damaged tissue. In a simple phrase? It is developing regenerative therapies for the treatment of various orthopedic disorders. Below is its product pipeline. It now has four products in its pipeline. But the only thing that matters at this point is TG-C (INVOSSA™), which is for cartilage regeneration.<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/034/069/original/1.jpg?1505987138" class="editor-image img-responsive" data-smartkarma-image-id="34069"></figure>What is the progress of Invossa clinical trial and commercialization?Two months ago, Kolon Life Science, TissueGene’s exclusive licensee for Asia including Korea, received marketing approval for Invossa from  the Korea Ministry of Food and Drug Safety (MFDS). In fact, this is the world's first cell and gene therapy for degenerative arthritis. Yes, all of Invossa's clinical trials in Korea are completed and is ready to hit the market later next month.<div class="content-highlight">More about this, here is TissueGene's official press release.<a href="http://www.tissuegene.com/download/TGI%20PR_Invossa_Korea_approval%2007122017%20final_PRpage.pdf" target="_blank">http://www.tissuegene.com/download/TGI%20PR_Invossa_Korea_approval%2007122017%20final_PRpage.pdf</a></div>In the US, Invossa is currently in Phase III clinical trials. TissueGene plan to use the results of Phase III clinical trials to seek a DMOAD designation for Invossa from the US FDA). What does this mean? Invossa has a chance to become the world's first cell and gene therapy for osteoarthritis of the knee. TissueGene plans to complete Phase III clinical trials by 2021, and obtain BLA approval by 2022 and go on sale in the US in 2023.<div class="content-highlight">BTW, in Japan, Kolon Life Science signed a sub-license agreement with Mitsubishi Tanabe Pharmaceutical Corporation, and Mitsubishi Tanabe Pharma is proceeding with the preparation of clinical trials through its exclusive development and commercialization rights in Japan. Target year for Invossa commercialization in Japan is 2023 as well.</div>

What is Korea's hottest stock now? I guess many investors will have SillaJen, Inc. (0908477D KS) in their mind when asked this question. SillaJen's YTD return is a whopping 217%. Now, we have another SillaJen-like company that is about to test Korea's IPO market. It is TissueGene Inc. (950160 KS). The company is actually based in Maryland, US. But this is a direct subsidiary of one of Korea's conglomerates named 'Kolon Group'. Kolon Corp (002020 KS) owns a 31.16% stake. In addition, Kolon Corp's largest single shareholder and Kolon Group chairman Lee Woong-ryeol owns a 20.38% stake. Another Kolon affiliate company called Kolon Life Science Inc (102940 KS) owns a 14.37% stake. So, Kolon Group currently controls a total of 71.13% stake in TissueGene.So, what does exactly this company do?Founded in 1999, the company basically develops medicines for the treatment of various orthopedic disorders (also called osteoarthritis or simply OA).(Osteoarthritis - The photo below is taken from TissueGene's corporate website)Then, what's so special about this company?Well, TissueGene's approach is a bit unique and different. The company employs a form of cell therapy to deliver therapeutic proteins directly to localized areas of damaged tissue. In a simple phrase? It is developing regenerative therapies for the treatment of various orthopedic disorders. Below is its product pipeline. It now has four products in its pipeline. But the only thing that matters at this point is TG-C (INVOSSA™), which is for cartilage regeneration.What is the progress of Invossa clinical trial and commercialization?Two months ago, Kolon Life Science, TissueGene’s exclusive licensee for Asia including Korea, received marketing approval for Invossa from  the Korea Ministry of Food and Drug Safety (MFDS). In fact, this is the world's first cell and gene therapy for degenerative arthritis. Yes, all of Invossa's clinical trials in Korea are completed and is ready to hit the market later next month.More about this, here is TissueGene's official press release.http://www.tissuegene.com/download/TGI%20PR_Invossa_Korea_approval%2007122017%20final_PRpage.pdfIn the US, Invossa is currently in Phase III clinical trials. TissueGene plan to use the results of Phase III clinical trials to seek a DMOAD designation for Invossa from the US FDA). What does this mean? Invossa has a chance to become the world's first cell and gene therapy for osteoarthritis of the knee. TissueGene plans to complete Phase III clinical trials by 2021, and obtain BLA approval by 2022 and go on sale in the US in 2023.BTW, in Japan, Kolon Life Science signed a sub-license agreement with Mitsubishi Tanabe Pharmaceutical Corporation, and Mitsubishi Tanabe Pharma is proceeding with the preparation of clinical trials through its exclusive development and commercialization rights in Japan. Target year for Invossa commercialization in Japan is 2023 as well.

TissueGene IPO Part 1 - IPO Prospectus Summary

Thematic (Sector/Industry)

SillaJen Biotherapeutics (established in 2006) is indeed a rare breed in Korean pharmaceutical world. It is not a generic drug maker. It is not a biosimilar maker either. It makes new biomedical products. A majority of Korea's pharmaceutical makers are still generic drug makers. The likes of Celltrion and Samsung Bioepis have emerged as a biosimilar maker. But they are still a few. Biomedical makers are even rarer. Hanmi Pharmaceutical is one of these rare breeds. Now, another biomedical maker…

SillaJen Biotherapeutics (established in 2006) is indeed a rare breed in Korean pharmaceutical world. It is not a generic drug maker. It is not a biosimilar maker either. It makes new biomedical products. A majority of Korea's pharmaceutical makers are still generic drug makers. The likes of Celltrion and Samsung Bioepis have emerged as a biosimilar maker. But they are still a few. Biomedical makers are even rarer. Hanmi Pharmaceutical is one of these rare breeds. Now, another biomedical maker…

SillaJen's December IPO: Valuation, Growth Expectation and IPO Timing

South Korea

Shin Poong Pharmaceutical Co., Ltd. manufactures pharmaceutical raw materials and prescription drugs, such as cephalosporin antibiotics, hemostatics, sedative agents, and anti-diabetics.

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Shinpoong Pharmaceutical (019170 KS)

TissueGene IPO Part 1 - IPO Prospectus Summary

What is Korea's hottest stock now? I guess many investors will have SillaJen, Inc. (0908477D KS) in their mind when asked this question. SillaJen's...

Sanghyun Park

SillaJen's December IPO: Valuation, Growth Expectation and IPO Timing

SillaJen Biotherapeutics (established in 2006) is indeed a rare breed in Korean pharmaceutical world. It is not a generic drug maker. It is not a...

Sanghyun Park

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