'KRW 1.9T deal with Lilly' Rznomics set to IPO filing

Expected market capitalization KRW 233.9

Seong-Wook Lee, CEO of Rznomics, presented company's growth strategy at the Initial Public Offering (IPO) press conference

"Editing technology without altering DNA is the company's strength…development will accelerate after the IPO"

​"Rznomics has already secured a global technology transfer deal with a Big Pharma based on our proprietary platform. This year, we signed a platform technology transfer agreement with Eli Lilly in the form of a 'platform deal' with a multi-option structure, involving candidate discovery, upfront payments, research funding, milestones, and royalties at each stage. We believe this is a strong signal that our technology holds global competitiveness in the RNA field."

Seong-Wook Lee, CEO of Rznomics, stated this about the company's competitiveness at the Initial Public Offering (IPO) press conference on December 3. The company signed a research collaboration and technology transfer agreement with Eli Lilly for an RNA editing therapy last May, valued at approximately KRW 1.9 trillion. He explained that since Big Pharma conducted extensive internal verification, confirming the technology's effectiveness and safety, the company's platform has been externally validated for its global competitiveness.

Seong-Wook Lee, CEO of Rznomics, presenting company's vision at the Initial Public Offering (IPO) press conference  on December 3

Rznomics is a biopharmaceutical company developing novel drugs based on its RNA Trans-Splicing Ribozyme (TSR) platform technology. The company has a unique platform that selectively recognizes and cleaves target RNA associated with a disease, while simultaneously replacing and editing it with therapeutic RNA. A key feature is its ability to act at the RNA level, enhancing safety by avoiding permanent DNA mutations, and its expandability to address multiple mutations with a single therapeutic agent.

Lee is an expert with over 30 years of research experience in RNA trans-splicing. He was a core researcher involved in the world's first RNA trans-splicing ribozyme study while conducting RNA function research and RNA-based therapeutic development at Cornell University and Duke University Medical Center in the U.S., resulting in a Nature Biotechnology cover article in 1997. After returning to Korea, he optimized the technology, achieved clinical entry in 2014, and founded Rznomics in 2017 based on this success.

Currently, Rznomics is developing gene therapies for diseases with high unmet medical needs, such as glioblastoma, hepatocellular carcinoma, and hereditary retinitis pigmentosa, based on its platform. Key pipelines include ▲the anti-cancer candidate 'RZ-001' ▲the Alzheimer's disease candidate 'RZ-003'▲the hereditary retinitis pigmentosa candidate 'RZ-004.'

The company is pursuing a differentiated out-licensing strategy for each pipeline. Regarding RZ-003, Lee stated, "It is currently in the preclinical stage, and we are pursuing technology validation with global pharmaceutical companies through a Material Transfer Agreement (MTA), aiming for a license-out before entering the clinic." He added, "Negotiations are also underway for a package deal structure, combining not only a single-asset technology transfer but also a platform deal to develop CNS targets desired by the partner company jointly."

Lee said, "For RZ-004, we plan to pursue technology transfer after securing clinical data up to Phase 1/2 Part A in Australia," and added, "We are currently opening data rooms and actively conducting business development meetings with multiple global companies."

Lee also provided the background on why Eli Lilly chose Rznomics' technology.

According to Lee, Eli Lilly's in-house researchers took the platform and experimented with it for about a year to verify the technology. Eli Lilly selected Rznomics' technology based on its high ratings for: ▲precise gene expression modulation without being excessive ▲the ability to correct multiple mutations with a single candidate, which is crucial for diseases like hereditary hearing loss where mutation patterns vary widely among patients ▲high safety due to minimal off-target editing and no alteration of the DNA.

Rznomics plans to list a total of 13,770,379 shares, including 2,060,000 shares for public offering. The offering structure is 100% new share issuance. The desired price range is KRW 17,000 to KRW 22,500. Based on this, the total public offering amount is estimated to be between KRW 35.0 billion and KRW 46.4 billion, with an expected market capitalization ranging from KRW 233.9 billion to KRW 309.5 billion.

The company used the Price-to-Earnings Ratio (PER) calculation method within the relative valuation approach to determine the desired offering price. PER reflects a company's profitability, risk, and market assessment. The company calculated its corporate value by considering the net income, total shares outstanding, and benchmark prices of three comparable companies (SK Biopharm, Hanmi Pharmaceutical, and Chong Kun Dang).

Rznomics first calculated the present value of its estimated net income for 2027, 2028, and 2029. Instead of simple summation, a 25% discount rate was applied to convert future earnings to current value. The theoretical corporate value was then assessed by multiplying the present value of the estimated net income by the average PER of the three comparable companies (29.58x). An additional discount rate, ranging from 44.46% to 26.49%, was applied to reflect the current market conditions and the valuation trends of recent technology-specific listed companies, ultimately determining the final desired price range.

Rznomics plans to use the capital raised from the IPO to accelerate platform development, expand its Research & Development (R&D) pipeline, and identify new candidates for global technology transfer. Specifically, based on the low end of the offering price, the net proceeds (KRW 34.1 billion, after deducting fees) will be allocated as follows: KRW 21.1 billion to R&D costs and KRW 13.0 billion to other operating expenses.

Lee stated, "Through this listing, we plan to accelerate the development of our existing pipelines further and focus on commercialization through global technology transfer and clinical entry," and added, "We will continuously establish new pipelines to broaden the scope of application and further strengthen our portfolio based on the scalability of our RNA editing platform."

Rznomics conducted demand forecasting from November 27 to today (December 3). It plans to conduct subscriptions for general investors over two days, starting on the 9th, to list on KOSDAQ this month. The lead underwriters are NH Investment & Securities and Samsung Securities.