Korean AI drug developer secures $14m Series B

The company is now in discussions with domestic and Chinese strategic investors regarding partnerships and additional investments prior to a KRW10-20 billion pre-IPO round, CEO Kim Yi-rang told Mergermarket. The IPO is expected in the second half of next year.

Founded in 2015, Oncocross primarily licenses drug candidates from other pharmaceutical companies. These fall into two categories: rescue drugs, which have failed clinical trials but Oncocross believes could be reconfigured to target different ailments; and extended profile drugs, which are in the pre-clinical stage and exhibit the potential to be used in different ways.

In each case, Oncocross uses its AI platform and drug database to search for new applications. The company claims that its technology can speed up the development process by dismissing unworkable solutions before launching trials. When Oncocross finds a new application for a treatment, it approaches the owner about a licensing deal.

There are currently 16 pipeline candidates, of which eight are partnerships with other drug developers and eight are in-house projects, Kim said. Five are scheduled to begin clinical trials within 12 months. By avoiding novel targets in favor of relatively mature drug candidates, trials can begin not long after the Oncocross gets involved.

In January, Oncocross signed a contract with Jeil Pharmaceutical to search for new applications for a candidate currently intended to treat stroke. Four months later, it sold the rights to a muscular dystrophy drug to Korea Pharma, having previously analyzed potential alternative use cases. This is said to be the first instance in Korea of an out-licensing agreement for a treatment identified using AI.

Jeong In-hyuk, a managing director at GNTech, noted that global pharmaceutical companies, including Schrödinger, are using AI and big data analysis solutions to try and shorten the drug development process. “Oncocross is building its own big data analysis and AI platform, and has excellent personnel who majored in pharmacy, chemistry, biology, and bioinformatics,” he said.

Oncocross raised KRW6 billion in Series A funding last year – at a post-money valuation of KRW26 billion – from Smilegate, GNTech, Wooshin Venture Investment, ID Ventures, E-Best Investment & Securities, and Hana Financial Investment, among others. Most of them re-upped for the Series B, with the likes of NowIB Capital, Vision Creator, KDB Capital, and KB Securities coming in as new investors.

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• Topics
• North Asia
• Healthcare
• Early-stage
• South Korea
• Pharmaceuticals