ViroMed, a biotech venture founded two decades ago on the Seoul National University campus, has only one drug selling on local shelves, but its presence on the KOSDAQ is nothing to sniff at.

With a market capitalization of 2.15 trillion won ($1.9 billion), the company ranks sixth on the country’s tech-loaded secondary stock exchange, closely chasing CJ E&M, which has over 19,000 on its payroll.

“ViroMed is a pioneer in the field of gene therapy, with its flagship VM202 project having the potential of serving markets with unmet needs,” said Kim Seong-jae, analyst of KDB Daewoo Securities.

Gene therapy, with a promise of fixing currently untreatable human diseases by correcting defective genes, is a fledgling field of biotechnology globally, with only two drug approvals in Europe and one in the United States. ViroMed specializes in creating treatments using a small DNA fragment called plasmid.

Stock-wise, the company has clearly benefitted from the latest global biotech boom, which exploded here last year with local leader Hanmi Pharmaceutical’s blockbuster deals with global drug giants.

Its shares closed at 151,000 won on Monday, up nearly 90 percent from a year ago. Before the bio boom in Korea, they had stayed below 50,000 won.

Valuation worries do exist, but the stock price is basically reflective of what investors view the company’s future worth will be, said Kyobo Securities’ Choi Sung-hwan.

“The firm has some important products under development,” he said.

According to ViroMed, its VM202 project is currently undergoing clinical trials in the U.S., Korea and China, for treatment of four different diseases and conditions, including Lou Gehrig’s disease, or ALS.

“The current targets of VM202 project are neurological and cardiovascular diseases,” said Hong Young-tae, head of business development at ViroMed.

In the second quarter of this year, the company is preparing to start the final, phase-three, clinical trial on VM202 for the treatment of diabetic peripheral neuropathy in the U.S. The VM202 for ALS treatment will likely go into the second-phase trial also in the U.S. within this year, he said.

“Additionally, VM202 will initiate phase three trials for patients with diabetic foot ulcer within this year.”

ViroMed claims that these could be global blockbuster drugs.

While preexisting drugs are only effective for temporary pain-relief, its VM202 has the potential to provide a fundamental cure for DPN patients, it explained. The market for DPN drugs is estimated to be around $3-4 billion worldwide.

As for the Lou Gehrig’s disease, the U.S. Federal Drug Administration in 2014 has given ViroMed’s VM202 the designation as an “orphan drug,” paving the way for its early commercialization.

“Out-licensing deals typically happen at this stage of product development,” Choi of Kyobo Securities said.

The firm raised 15 billion won in March through new share issuance to its CEO Kim Yong-soo and founder Kim Sun-young. The funds raised will be used to bankroll the looming third-stage clinical trials of VM202, the company said.

In 2015, it reported revenue of 7.6 billion won, up 25.3 percent from a year ago, and an operating profit of 10.9 billion won, up 342 percent.

By Lee Sun-young (milaya@heraldcorp.com)