HLB Pharmaceutical CEO Sells Half of Preemptive Rights Certificates to Fund Rights Offering Subscription

On the 25th, HLB Pharmaceutical CEO Park Jae-hyung sold 92,652 of the 185,304 preemptive rights certificates he held—half the total—to DS Investment & Securities over the counter at KRW 676 per share. The sale followed the deposit of the preemptive rights certificates on the 19th in connection with the rights offering allocated to shareholders and is understood to have been intended to secure cash to subscribe for the remaining half of the new shares.

After the sale, CEO Park’s holdings of preemptive rights certificates fell to 92,652. His holdings of 564,726 common shares were unchanged, but his ownership stake in the company’s outstanding shares declined from 1.88% to 1.72% because of the increase in total shares outstanding. His ownership stake in specified securities, including common shares and preemptive rights certificates, was calculated at 2.00%.

■ Company maintains facility investment despite 49% plunge in offering price

The expansion of the new plant in Hyangnam, Gyeonggi Province, is behind HLB Pharmaceutical’s decision to pursue the rights offering. The initial target was to raise approximately KRW 120 billion, but the first offering price was set at KRW 5,650, down approximately 49.3% from the indicative price of KRW 11,150 amid the broader decline in HLB Group share prices. Because of the sharp drop in the offering price, the KRW 15 billion allocated for debt repayment was canceled in full, while operating funds were substantially reduced from KRW 50 billion to KRW 5.8 billion.

However, the KRW 55 billion allocated for facility investment in the Hyangnam new plant, the core purpose of the offering, was maintained in full. Once completed, the new plant will more than double HLB Pharmaceutical’s annual drug production capacity, from 300 million tablets to approximately 700 million tablets. The company expects a quantum leap in performance when the new plant begins full-scale operations in 2028.

■ CEO’s intention to participate in subscription sends signal to market

With share-price volatility across the group intensifying because of parent company HLB’s delayed U.S. Food and Drug Administration approval of a new drug and receipt of a complete response letter (CRL), CEO Park’s sale of some of his preemptive rights certificates is being interpreted as a way to reduce his personal financial burden while directly demonstrating his intention to participate in the subscription. Industry observers view it as a practical funding strategy to help the rights offering succeed even during a period of declining share prices.

The decision to proceed without reducing the KRW 55 billion in facility investment is viewed in the same context. HLB Pharmaceutical is designing the Hyangnam new plant as a global production hub for key drugs, including HLB’s liver cancer drug rivoceranib, and industry sources assess that the decision reflects the group’s commitment to expanding contract manufacturing organization (CMO) volumes.

■ Subscription success will be a short-term share-price variable

CEO Park is a registered director who was appointed CEO of HLB Pharmaceutical on March 26, 2025, and is credited with leading the company to surpass KRW 200 billion in annual revenue for the first time since its founding that year. His management strategy of completing vertical integration across drug manufacturing, sales and distribution is said to have translated into results.

The immediate point to watch is the existing shareholders’ subscription scheduled for Sept. 10-11. The final offering price will be set on Sept. 8, and the subscription participation rate of the largest shareholder and related parties, including CEO Park, as well as the response from general shareholders, will be key factors determining the success of the rights offering and the short-term direction of the share price. Over the medium to long term, attention will also focus on whether sales diversification in the consumer health care segment, including the joint-health functional food Quanchel, can become a stable source of revenue.