Korea’s Medipost, success story of tech-focused private equity firms Crescendo, Skylake

Skylake Equity Partners Ltd. and Crescendo Equity Partners Ltd. surprised the South Korean private equity (PE) industry by acquiring Medipost Co., a domestic biotech firm, in 2022. The move stood out as buyout firms focus on information technology sectors such as semiconductors.

The biotech sector is a challenging one for PE firms because clinical trials often take years, their results are uncertain and exits within certain periods are not guaranteed.

Skylake and Crescendo, however, made a bet on Medipost as the company generated a stable cash flow with a 70% market share in the country’s cord blood banking sector.

The PE firms also saw growth potential in Cartistem, Medipost’s stem cell-based treatment for knee cartilage defects. No comparable therapy has yet been commercialized in major markets such as the US and Japan.

Successful global clinical trials and regulatory approval of the medicine are expected to open markets far bigger than South Korea’s. Japan’s pharmaceutical market is three to four times the size of Korea’s; the US market is more than ten times larger.

CASH FOR GLOBAL EXPANSION

Medipost needed financial support because global clinical trials would cost hundreds of millions of dollars. The company also needed to handle overseas regulations and build international networks.

When Medipost founder and former CEO Yang Yoon-sun weighed these challenges, Skylake co-CEO Min Hyun-Ki proposed a partnership for global expansion. Crescendo CEO Kevin Lee considered investing in the biotech company.

The two PE firms, which had an existing relationship, agreed on a joint acquisition.

The buyout firms jointly invested 211.8 billion won ($147.1 million) in the takeover. In 2022, they spent 140 billion won to acquire management control, followed by an additional 71.8 billion won through a rights offering the following year.

Skylake and Crescendo are now Medipost’s two largest shareholders, with stakes of 22.28% and 20.91%, respectively.

Yang retains a minority stake and serves as an advisor, supporting business development and external relations.

TRANSFORM INTO A PROFITABLE BIOTECH COMPANY

After the acquisition, Skylake’s executives restructured Medipost  to increase operational efficiency and ramp up its corporate value.

They consolidated research and development projects to focus on those with a higher likelihood of success and stronger commercial prospects while addressing excessive use of raw materials stemming from production inefficiencies.

They divested underutilized land and equipment and transformed some facilities into lines for the contract development and manufacturing organization (CDMO) business to generate new revenues.

Medipost also streamlined its organization, slimming seven business divisions to four and selling its stem cell-based cosmetics subsidiary.

Those measures helped the company record a profit in 2023 after years of operating losses. It reported an operating profit of 3.7 billion won in 2025. Sales grew 21% to 74.1 billion won in 2024 from 61.3 billion won in 2022.

Its share price, which hit a record low of 5,450 won in August 2024, has since rebounded and touched 25,350 won on Jan. 29 — its highest since August 2021.

GLOBAL CLINICAL TRIALS FOR CARTISTEM

In the early 2000s, Medipost collaborated with Korea’s Sungkyunkwan University and the orthopedic research team at Samsung Seoul Hospital to confirm that stem cells from a baby’s umbilical cord blood could regenerate cartilage, advancing its proprietary cultivation technology.

This allowed the company to create Cartistem.

After entering domestic clinical trials in 2005, the therapy was approved by Korea’s Ministry of Food and Drug Safety in 2012 and has since become a leading knee cartilage treatment in the country.

Cartistem remains Medipost’s core revenue source, accounting for some 30% of the company’s sales.

PARTNERSHIP WITH TEIKOKU BEFORE JAPAN’S APPROVAL

The PE firms’ investment hinges on Cartistem’s success in global clinical trials. In Japan, trials that were stalled at phase 2 before the acquisition have now completed patient dosing for phase 3.

Although Medipost has yet to secure regulatory approval in Japan, the company in December announced a multi-year partnership with Teikoku Seiyaku Co., Ltd. for the commercialization of Cartistem.

Commercialization of the treatment for knee osteoarthritis in Japan is expected by 2027 if Medipost succeeds in its trials and gets the authorities’ nod.

Results on treatment for knee osteoarthritis are expected by the end of 2026 with approval likely to follow.

LAST HURDLE: USA

Investors are keenly watching whether Cartistem can make inroads into the US, the world’s top medical and pharmaceuticals market.

Medipost recently gained approval for its phase 3 clinical trials from the US Food and Drug Administration (FDA), marking a crucial step toward commercialization.

The Kosdaq-listed company has already completed clinical design consultations and production facility validation to start the trials, which will test Cartistem’s safety and efficacy on hundreds of patients.

The company aims to win a biologics license application (BLA) for the drug in 2028-2029 ahead of its commercialization in 2031.

Medipost is seeking an additional 250 billion won in funding to support the US clinical trials and build global infrastructure.