Expert cites tech exports, global pharma deals, rate cuts as drivers for Korean bio sector’s 2025 growth
Seers Technology, D&D Pharmatech, OliX, ABL Bio.
Among the top 10 stocks by share price growth this year, four were bio·healthcare-related. Seers Technology, an AI medical device company, saw its stock surge 1,074% since the start of the year, achieving a “tenbagger (10x return).”
Will bio stocks continue their rally in the “Year of the Red Horse” next year? On the 29th, Sim Joo-hyun, a manager at Samsung Active Asset Management who oversees the largest domestic bio fund (4.9 trillion won), was asked about next year’s outlook.
The KoAct BioHealthcare Active Equity-Index Fund (ETF) managed by Sim holds around 20 domestic bio stocks and has achieved an 80% return over one year. Unlike passive products that track indices, active ETFs aim for excess returns by selecting promising stocks.
-Which stocks contributed significantly to the high return rate of 80%?
“Major holdings include ABL Bio, Alteogen, LigaChem Biosciences, OliX, and D&D Pharmatech. Among these, ABL Bio has been held in high proportion. We built confidence by closely reviewing its representative interviews on YouTube and various analysis reports. ABL Bio drove returns by successfully exporting platform technologies twice this year, in April and November.”
-Why did individual funds surge last month?
“On the 12th of last month, ABL Bio announced a technology transfer agreement with global pharmaceutical company Eli Lilly worth 3.75 trillion won. Volatility control (VI) was triggered within about 7 seconds of the disclosure, and the stock price immediately jumped to the daily limit. Since ABL Bio accounted for 12% of the ETF’s holdings, the ETF price also surged 16% in a single day. Individual investors injected 42.8 billion won, making it the top net buyer among all ETFs.”
-Why were there so many K-bio technology export successes this year?
“Blockbuster drugs with patents expiring by 2030 are flooding the market. Once patents expire, drug prices plummet and sales drop. Global pharmaceutical companies have no choice but to actively pursue technology transfers or mergers and acquisitions (M&A) with bio ventures that have promising new drug pipelines to fill revenue gaps. This year, domestic bio companies’ technology exports reached a record 22 trillion won for the same reason.”
-Why are big pharma companies targeting Korean bio firms?
“Big pharma facing patent cliffs are highly interested in ‘biobetters (Biobetter),’ which improve the efficacy or convenience of existing drugs. Biobetters have high added value as they must demonstrably outperform original drugs. Korea has significant competitiveness in platform technologies and candidate materials for biobetters. Alteogen’s subcutaneous (SC) formulation technology, ABL Bio’s blood-brain barrier (BBB) shuttle, and LigaChem Biosciences’ antibody-drug conjugate (ADC) linker technology are representative examples.”
-Will bio stocks remain strong next year?
“Korean bio companies have clear competitiveness in multiple areas. In contract development and manufacturing organizations (CDMOs) and biosimilars, global top-tier companies are already established. While blockbuster drugs have not yet emerged, the potential is sufficient. As mentioned earlier, global big pharma facing patent expirations are aggressively pursuing M&A and technology acquisitions with abundant liquidity. This is an unparalleled opportunity for domestic bio companies with technological capabilities.”
-What is the investment environment for bio stocks next year?
“The global interest rate cut trend is favorable for bio stocks. Bio companies require essential R&D funding, and reduced financing costs lead to corporate value re-evaluation. Although there are concerns about economic slowdowns, people cannot stop taking medicine just because the economy is bad. Government policies to revitalize the KOSDAQ market, which has a high proportion of bio companies, are also positive. The U.S. push for biosecurity laws to counter Chinese bio companies will also benefit domestic firms.”
-Why are newly listed bio stocks performing well recently?
“Rznomics and AimedBio saw their stock prices surge 300% on their listing days. According to Hyundai Investment & Securities (as of November), four of the top five stocks by share price growth compared to their public offering price this year were bio companies. These include GTG Bio, Rokit Healthcare, Protina, and Intuxel. These companies either already achieved technology transfers or have products in the commercialization stage. They also share pipelines in ‘hot’ sectors with frequent technology transfers or M&A. Since well-prepared companies are listing, their performance has been strong.”
-Many investors avoid bio stocks, citing distrust.
“The probability of a new drug successfully reaching the market after Phase 1 clinical trials is only around 10%. Many Korean biotech firms list with just one or two core pipelines. If a core pipeline fails in clinical trials, the stock price plummets.
However, business models have changed significantly compared to the past. More new drugs are now successfully launched after clinical trials, and bio companies are adopting strategies to develop multiple drugs based on proprietary platforms rather than relying on single pipelines.
Previously, stock prices surged merely with news of clinical trial entries, but recently, only companies with proven achievements — such as U.S. Food and Drug Administration (FDA) approvals, specific milestone achievements, or trillion-won technology exports — see stock price movements. The process of selecting companies with tangible substance has become more critical than ever.”
-How to distinguish between good and bad bio stocks?
“The key is the company’s technological capabilities. It’s not enough to look at the total addressable market (TAM) size of the pipeline. You must scrutinize the actual accessible market, the sales volume of competing drugs already on the market, and the mechanisms and clinical data of competing drugs in clinical stages.
Of course, it’s challenging for individual investors to analyze all this. In such cases, examining partnerships is a method. Technology transfer achievements with global pharmaceutical companies are the most reliable ‘guarantees’ as they validate the company’s technology externally.”
-What is the outlook for the global bio market?
“It’s hard to say one market is better than the other, as the composition of listed companies differs between domestic and global markets. However, if forced to compare, the global bio market, with its high proportion of big pharma, is relatively stable. On the other hand, Korean bio stocks, which grow based on new drug development achievements, are more attractive in terms of return elasticity.”
