Psomagen, a U.S. subsidiary of Macrogen, said it would use Korea’s “technology exception policy” to go public on the secondary KOSDAQ market.
The U.S. bioscience research firm selected Shinhan Investment Corp. as the lead manager for its initial public offering on KOSDAQ.
Psomagen received “A” rating in technology assessment from Korea Technology Finance Corp. and Korea Enterprise Data in June. Based on the high marks on technology power, the company hopes to be listed on the tech-heavy stock market within the first half of next year.
The Korea Exchange (KRX) began to allow foreign companies to use the technology exception rule as of July 1, on the condition that they undergo stricter reviews on technological competitiveness. Korean companies must receive “A” and higher than “BBB” rating from two rating agencies designated by the KRX. Foreign firms must receive “A” rating from both of two rating agencies.
If Psomagen succeeds in IPO in Korea, it will become the first foreign biotech firm to be listed on KOSDAQ under the technology exception policy.
Through the KOSDAQ listing, Psomagen aims to broaden its share in the direct-to-consumer (DTC) genetic testing and microbiome market and prepare for a project to build big data in precision medicine.
In the Korean market, DTC genetic testing is allowed only in 12 issues such as skin problem, hair loss, and blood vessel problem. Genetic tests related to cancer and chronic diseases are approved only through medical institutions in Korea, which makes it difficult for the DTC genetic testing market to grow.
It is a different story in the U.S., however. The DTC genetic testing market in America is expanding at the fastest pace in the world, with one in 25 adults using genetic testing. Companies, such as 23andme and Ancestry DNA, provide a variety of genetic tests ranging from ancestry identification to disease prediction.
Industry watchers predict that more than 100 million American people will receive DTC genetic testing within the next two years. According to Kalorama Information, the DTC genetic testing market is expected to reach $1.8 billion in 2025.
Macrogen set up Psomagen in Rockville, Md., in December 2004. Macrogen holds 59.5 percent stake in Psomagen, which achieved over 20 billion won ($16.9 million) sales in genomic analysis in the U.S.
Psomagen has offered Whole Genome Sequencing analysis for over 40,000 people in the U.S. The company is concentrating on diagnostic and DTC genetic testing business in North America. It also has a microbiome testing technology using intestinal microorganisms to predict and prevent diseases.