South Korea’s biotherapeutics firm SillaJen announced on March 20 that it has decided to secure additional funds worth 110 billion won ($97.31 million) through issuing convertible bonds.

The company said that the funds will mainly be used for developing its drug candidate Pexa-Vec, an oncolytic virus vaccine designed to kill cancer cells, which is currently undergoing phase 3 clinical trials, and new pipelines.

SillaJen originally planned to secure around 300 billion won but adjusted the amount to 220 billion won. According to industry sources, the company had to adjust the amount again after a local news outlet reported that the future of Pexa-Vec is murky. According to sources, although the biotherapeutics company called it “fake news,” some investors have backed out from its plan.

Kium Securities is currently in charge of organizing the deal through sell-down transactions and the amount of fresh funds.

Industry insiders note that SillaJen has to secure additional funds because it had been losing money over the last three years. Its operating loss which reached 46.8 billion won in 2016 increased to 47.1 billion won as of the third quarter last year. Moreover, it spends an average of around 50 billion won for research and development every year.

By Song Seung-hyun (ssh@heraldcorp.com)