Quriant, a KOSDAQ-listed company, is accelerating the development of its dual payload antibody-drug conjugate (ADC) as a key growth driver. While the company is pursuing both clinical trials for existing drug candidates and the development of a new ADC platform, securing the necessary funding has become a significant hurdle. Initially, Quriant aimed to raise 140 billion won, but delays in the funding process have coincided with ongoing cash burn from research and development (R&D).
According to the financial investment industry, Quriant is speeding up the development and commercialization of its dual payload ADC platform. ADCs are therapies that combine antibodies targeting specific cells, such as cancer cells, with drugs that kill those cells. The dual payload ADC approach enhances therapeutic efficacy by attaching different mechanisms of action to a single antibody.
Quriant plans to expedite the platform's launch to capture a share of the global dual payload ADC market. The company is also continuing to develop its existing pipeline. The drug Adricetnib (Q702) is currently undergoing a Phase 1b clinical trial in Spain for patients with recurrent or refractory chronic graft-versus-host disease (cGVHD). Last month, the number of trial participants was expanded from a maximum of 18 to 24.
To secure the necessary funds for new drug and ADC development, Quriant has pursued a large-scale external financing initiative. This includes 70 billion won in permanent convertible bonds (CB) and convertible redeemable preferred shares (CPS), along with an additional 70 billion won in general CBs, totaling 140 billion won. The company had planned to complete the fundraising by June following an investor presentation in April.
However, the funding has been delayed beyond the initial timeline. As of early last month, the amount raised was approximately 70 billion won, only half of the target. With the planned fundraising schedule pushed back by more than two months, the challenge of securing additional funds for ADC and existing pipeline development has become pressing.
Given the financial situation, Quriant cannot afford to delay further. According to the Financial Supervisory Service's electronic disclosure system, Quriant's cash and cash equivalents stood at 2.3 billion won, with other liquid financial assets at 32.5 billion won as of the end of June. Combined, this amounts to about 34.8 billion won, a decrease of 15.9 billion won from approximately 50.7 billion won at the end of last year.
In the first half of this year, Quriant reported an operating cash flow of negative 16.8 billion won, averaging about 2.8 billion won in cash outflow per month. If this trend continues, the company could sustain its liquidity for about 12 months based on its cash reserves as of the end of June. Without additional funding, the need for capital could become more urgent around mid-next year.
The burden of R&D costs is also significant. In the first half of this year, Quriant's revenue was 3.9 billion won, while R&D expenses, before government subsidies, reached 16.5 billion won, exceeding revenue by four times. The ratio of R&D expenses to revenue stands at 429.25%. During the same period, the operating loss widened to 20.5 billion won, compared to 13.5 billion won in the first half of last year.
Potential dilution of shares due to existing mezzanine financing also adds to the pressure of securing additional funds. According to the semi-annual report, as of the end of June, the total outstanding CBs amounted to 18.8 billion won. The conversion potential for the second permanent convertible bond and the fourth CB is approximately 1.31 million shares and 670,000 shares, respectively, totaling over 1.98 million shares. If additional mezzanine financing or capital increases are pursued, existing shareholders may face dilution concerns.
Amid concerns over funding, Quriant's stock has experienced significant volatility. The company's share price fell by 19.9% from 25,650 won on August 26 to 20,550 won on August 31, after dropping 13.06% on the 27th and 8.97% on the 28th, before rebounding by 1.23% on the 31st. During trading on the 31st, the stock price dropped to as low as 18,170 won, indicating increased volatility.
In response to the recent fluctuations in stock price, Quriant stated, "We believe this is due to rumors that differ from the facts circulating in the market." The company maintains that both the development of the dual payload platform and its funding plans are proceeding without issues, and it aims to accelerate the platform's launch to meet the growing global demand for dual payload ADCs.
A securities industry official noted, "As Quriant continues to develop its ADC and existing pipeline, the key will be how much of the 140 billion won funding can be secured and how the company will address any funding shortfalls."
* This article has been translated by AI.
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