KRW 170 billion fund dedicated to phase 3 trials to be launched; Korea Investment Partners selected

A KRW 170 billion fund dedicated to phase 3 clinical trials will be established to support domestic pharmaceutical and biotechnology companies through the final hurdle of new drug development.

The Ministry of Health and Welfare said on the 27th that it had selected Korea Investment Partners as the final manager of the “Phase 3 Clinical Trial Specialized Fund,” which will focus on supporting late-stage clinical trials by pharmaceutical and biotechnology companies. The fund is expected to be established at KRW 170 billion, exceeding its initial target of KRW 150 billion.

A total of four managers applied for the selection process, and Korea Investment Partners was ultimately selected after document reviews and on-site due diligence. The ministry said Korea Investment Partners received high marks for the capabilities of its pharmaceutical and biotechnology investment professionals, its high investment returns and its ability to raise private capital.

The fund was established to address the investment gap in late-stage clinical development, often called the “valley of death,” where substantial funding is required but the risk of failure is high. The manager must invest at least 60% of the fund’s total committed capital in companies pursuing phase 3 trials for innovative new drugs or biobetter pipelines.

A biobetter is a drug with improved efficacy compared with an existing drug. Korea Investment Partners plans to invest in about 10 companies. According to the Korea Drug Development Fund, as of 2025, 57 pipelines were undergoing phase 3 trials in South Korea.

In particular, the Ministry of Health and Welfare allowed an “early formation” approach to provide rapid support to companies with urgent funding needs. Accordingly, investments can begin early once at least KRW 120 billion, or 80% of the fund’s target size, has been secured.

The fund’s creation also signals progress toward the government’s goal of establishing a “KRW 1 trillion mega-fund.” If the new phase 3 fund is added to the existing K-Bio and Vaccine Fund, a total of KRW 949.6 billion in funding will be secured.

Seong Chang-hyeon, director general of the Health Industry Policy Bureau at the Ministry of Health and Welfare, said, “This will provide an opportunity for companies that have hesitated to pursue late-stage clinical trials because of funding shortages despite having promising new drug pipelines to take a leap forward,” adding, “We will spare no policy or financial support so that they can achieve results with global blockbuster drugs.”

Noh Yeon-hong, chairman of the Korea Pharmaceutical and Bio-Pharma Manufacturers Association, also expressed optimism, saying, “The Phase 3 Clinical Trial Specialized Fund, the first of its kind established by the government, will be an important turning point that advances the investment ecosystem of Korea’s pharmaceutical and biotechnology industry to the next level.”