What Happened?

Olix will issue 400,986 new shares through the exercise of convertible bonds. The conversion price is 16,283 won, significantly higher than the current stock price (93 won). This is expected to dilute the value of existing shareholders’ stakes. The new shares are scheduled to be listed on August 14, 2025.

Why the Convertible Bond Exercise?

Olix’s business model, reliant on licensing agreements, leads to high short-term revenue volatility. Recent revenue decline is related to the timing of licensing agreements for major pipelines. The funds secured through this exercise will be used for new drug development and R&D investment. Following the successful licensing of its core pipeline OLX702A (a 911.7 billion won deal with Eli Lilly and Company), Olix is expected to accelerate development of additional pipelines.

So, What’s the Impact on Stock Price?

In the short term, stock dilution due to the increased number of shares is inevitable. However, in the long term, increased R&D investment and pipeline development progress can drive an increase in corporate value. Disclosure of the detailed terms of the OLX702A licensing agreement will be a key factor in determining the future stock price trajectory.

What Should Investors Do?

Rather than reacting to short-term price fluctuations, investors should focus on Olix’s long-term growth potential. Given its high growth potential and equally high risk, investment decisions require careful consideration. Closely monitoring clinical trial results of major pipelines, progress of licensing agreements, and changes in the market environment is crucial.