Handok signs letter of investment worth KRW 10 billion with Korea Investment Partners to launch new medical equipment company

– KRW 10 billion in funding will be provided by Korea’s Global Pharmaceutical Industry Development Fund, in which the Ministry of Health and Welfare and Korea Development Bank have invested.

– The new medical equipment company will be an independent institution that conducts medical equipment research and development, with Handok and Korea Investment Partners Co., Ltd. owning 51 percent and 49 percent of the shares, respectively.

– The company will focus on the development of the DENEX™ medical device, which is used to conduct kidney neurectomy for the treatment of incurable hypertension.

On 19, Handok (Chairman and CEO: Kim Young-jin) signed a letter of investment with Korea Investment Partners Co., Ltd. (President: Baek Yer-hyun) to launch a new medical equipment company. Under the agreement, Handok will receive an investment of KRW 10 billion from Korea’s Global Pharmaceutical Industry Development Fund, which is administered by Korea Investment Partners.

With 51 percent of its shares owned by Handok and 49 percent owned by Korea Investment Partners, the new company will be an independent institution established to conduct medical equipment research and development. In the form of a capital increase, Korea Investment Partners will invest KRW 10 billion in the new company. With the signing of the letter of investment, the new company will be incorporated, and is expected to accelerate the global development of DENEX™, which is a medical device used to conduct kidney neurectomy for the treatment of incurable hypertension.

Handok Chairman Kim Young-jin stated, “Recently, we have been facing diverse challenges in our effort to grow as a global, comprehensive healthcare business, including our purchase of Genexine shares, incorporation of the joint venture Teva-Handok, and acquisition of the pharmeceutical division of Pacific Pharmaceuticals.” He went on to say, “Through the launch of this new medical equipment company, we will have an oppurtunity to accelerate our development of DENEX™ as well as expand our medical equipment business.”

DENEX™, which will now be developed by the new company, is an innovative medical device used for the treatment of incurable hypertension that cannot be controlled by drugs. With the insertion of a high frequency catheter, the device kills nerve cells in the vicinity of kidney arteries and dissects nerve bundles. Incurable hypertension is defined as cases of hypertension where, even after the administration of more than three drugs, systolic blood pressure remains higher than 140mmg. Approximately 12 to 15 percent of hypertension patients are diagnosed with the condition. 

The potential size of the global market for this kidney neurectomy system is estimated to be USD 6 to 7 billion. Currently, Medtronic, Boston Scientific, and several other global medical equipment companies are actively engaged in the development of similar systems. Besides incurable hypertension, kidney neurectomy may also become part of the treatment for various diseases caused by abnormal activation of the sympathetic nervous system, such as heart failure, chronic nephropathy, diabetes, and heart diseases.

Handok initiated the development of DENEX in 2012, and preclinical studies are currently being carried out in Korea and Singapore. DENEX has been selected as a national project of Korea and Singapore, such as research and development national collaboration research, industrial technology base institution supporting business, etc., and research funds have been granted. DENEX is easy to use, features excellent surgical efficacy, and has been proven to be safe. The neurectomy catheter design has obtained three Korean patents, and patent applications have been submitted to other countries.

In the future, the new medical equipment company plans to obtain European CE approval for DENEX in 2016, and launch the device in Europe in 2017 and in Korea in 2020. Based on Handok’s experience in the respiratory system market, the company hopes to successfully establish DENEX in the Korean market and promote its licensing in Europe, China, and other countries. Currently, through the international collaboration and research support project funded by the Ministry of Health and Welfare and the Korea Health Industry Development Institute, DENEX II, the successor to DENEX, is currently being developed in cooperation with Singapore’s national research institution A*STAR. In the future, the two institutes plan to investigate the expanded use of DENEX in the treatment of cardiovascular diseases.

The Global Pharmaceutical Industry Development Fund (Head Fund Manager: Hwang Man-soon) of Korea Investment Partners is a fund that exclusively supports the global expansion of the Korean pharmaceutical industry and seeks to strengthen the competitiveness of Korean pharmaceutical companies. The fund was established with a total of KRW 135 billion invested by the Ministry of Health and Welfare, Korea Development Bank, Korea Investment Partners, and Korea Investment and Securities. The fund makes investments with the goal of strengthening the potential of Korean pharmaceutical companies developing new drugs; improving industrial potential, such as through the development of advanced production systems; and promoting overseas sales. In addition, as the fund was established as a private equity company, it is capable of investing in not only small businesses but also medium–sized pharmaceutical companies.