Major domestic pharmaceutical and biotech companies are rapidly transitioning to a second-generation owner-centered management structure. Companies such as Samjin Pharmaceutical, AhnGook Pharmaceutical, and Celltrion have recently placed second-generation family members at the forefront, signaling a shift in leadership.
Samjin Pharmaceutical has decided not to propose the reappointment of CEO Choi Yong-joo at the upcoming March general shareholders' meeting. As a result, the joint management system led by Presidents Choi Ji-hyun and Jo Kyu-seok is expected to continue. The company is expanding investments in new drug development, particularly in oncology, while strengthening its research and development (R&D) capabilities through an open innovation strategy.
AhnGook Pharmaceutical transitioned to a co-CEO structure in November last year when Vice Chairman Eojin, a second-generation owner, took over management. This marked a shift from the previous sole leadership of CEO Won Deok-kwon to a dual leadership model with CEO Park In-cheol. Vice Chairman Eojin is focusing on expanding new business ventures and actively entering the B2C market as part of the company's "AhnGook Pharmaceutical 2030 New Vision" initiative.
At Celltrion, the succession process has been set in motion with the appointment of Seo Jin-seok, the son of Chairman Seo Jung-jin, as CEO. Having started his career as a researcher, CEO Seo has demonstrated his management skills by leading the development of biosimilars. Now, as the CEO of the merged entity Celltrion-Celtirion Healthcare, he is spearheading new drug development and global market expansion.
However, as owner-centered management structures persist, concerns over "owner risks" are growing, raising instability within companies. Recently, several pharmaceutical and biotech firms have faced legal issues and management disputes, which have negatively impacted their corporate image and financial performance.
Biotech materials company Amicogen recently removed its founder and Chairman Shin Yong-chul from his position as an inside director through an extraordinary general meeting. Shin's involvement in a fraud case worth approximately 5 billion KRW was a major factor in eroding shareholder trust.
Shinpoong Pharmaceutical’s former CEO Jang Won-jun was indicted for allegedly using insider information related to the development of a COVID-19 treatment to avoid losses amounting to hundreds of billions of KRW. The Securities and Futures Commission under the Financial Services Commission determined that Jang had violated the Capital Markets Act and referred the case to prosecutors.
Management disputes are another major example of owner-related risks. Hanmi Pharmaceutical Group experienced internal turmoil for a year due to a leadership struggle among the founding family over inheritance taxes. Although the dispute was resolved with Song Young-sook being appointed as the new CEO, the company suffered a sharp drop in stock price and financial setbacks during the conflict.
DongSung Pharmaceutical, a leading player in the domestic hair dye market, recently issued 20 billion KRW worth of private convertible bonds (CBs) to secure liquidity. However, concerns have been raised over the company's financial health, as it has been repeatedly issuing new debt securities to repay existing ones, highlighting the urgent need for fundamental financial restructuring.
The company’s revenue has stagnated over the past five years, with continued operating losses. Its debt ratio surged from 128% at the end of 2020 to 228% in September 2024, worsening financial stability. Furthermore, its current ratio has fallen below 100%, raising concerns about its ability to meet short-term debt obligations.
Amid this crisis, DongSung Pharmaceutical has appointed third-generation owner Na Won-gyun as its new CEO. He has pledged to drive performance improvement through new business expansions and global market penetration. However, resolving the company's immediate liquidity issues is expected to be his top priority.
Industry experts argue that overcoming the limitations of owner-led management requires the introduction of a professional management system. Global pharmaceutical giant Merck has adopted an independent management approach by appointing professional executives while maintaining oversight by major shareholders.
However, some caution that a professional management system alone may not completely eliminate owner-related risks. One industry insider noted, "The key issue is not whether a company is run by an owner or a professional manager, but rather the commitment to ethical management," emphasizing the need for stronger corporate ethics at the organizational level.
The Korea Health Industry Development Institute (KHIDI) also stated, "The demand for ESG (Environmental, Social, and Governance) management in the pharmaceutical and biotech industries will continue to rise." The institute stressed that establishing a culture of ethical management within companies is essential for sustainable growth.
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"Pharma & Biotech Industry Accelerates Second-Generation Succession Amid Growing Management Risks"
Major domestic pharmaceutical and biotech companies are rapidly transitioning to a second-generation owner-centered management structure. Companies such as Sam
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