pharm edaily

[Seungkwon kim, Edaily Reporter] Shares of several South Korean biotech and pharmaceutical companies surged Tuesday amid news of ownership changes and clinical trial expectations.

Adbiotech, a veterinary vaccine and supplement company, soared by the daily upper limit for the third consecutive trading day. Shares rose 29.88% (965 won) to close at 4,195 won, following strong buy-side momentum from market open.

The rally comes after the company disclosed on June 9 that OcuPhi BioM (OQP BioM) would become its largest shareholder through a 28 billion won third-party allotment capital increase.

Adbiotech (KG zeroin)

OQP BioM is a biotech firm developing the ovarian cancer immunotherapy candidate “Oregovomab.” Market expectations appear to be linked to a potential restart of the drug’s development.

Oregovomab was initially acquired in 2020 by South Korean firm Diarc (now Hurim A-Tech) from Canada’s OncoQuest for about 375.1 billion won. The drug changed hands multiple times, eventually landing with CanaraBio (now HyunDai Feed), which later suspended its global Phase 3 clinical trials following regulatory recommendations.

CanaraBio went into complete capital impairment after writing off nearly 150 billion won in intangible assets related to Oregovomab, leading to a delisting crisis.

Further controversy surrounds both CanaraBio and OQP BioM, as multiple executives face ongoing criminal trials over alleged stock manipulation schemes. Prosecutors claim they used news surrounding the immunotherapy drug to inflate share prices and gain illicit profits exceeding 700 billion won.

In July 2024, Seoul Southern District Prosecutors indicted a group for gaining about 63.1 billion won through such schemes. These developments have raised significant investor concerns.

In June 2023, the CEO of OQP BioM was arrested on charges of securities fraud and obstruction of business, an incident linked to the high-profile Edison Motors stock manipulation case. At least three others connected to CanaraBio’s network were also detained.

A biotech industry official warned retail investors to exercise caution, noting that CanaraBio once traded above 170,000 won before collapsing to penny-stock levels and facing delisting.

MediPost (KG zeroin)

“Retail investors should be extra careful, especially now that the government is cracking down on such stock manipulation,” the source said.

Meanwhile, GenNBio, another biotech company facing imminent delisting, saw its shares surge by 195.24% to close at 62 won on the third day of its liquidation trading. The stock had plunged 90.75% on the first day of delisting trades.

GenNBio was delisted after failing to resolve auditor opinion issues for its 2023 and 2024 fiscal years. The Korea Exchange (KRX) finalized the delisting decision on June 4. The stock will be traded on a liquidation basis until June 17, with final delisting set for June 18.

Such rapid gains are typically attributed to speculative short-term traders entering after trading resumes, often seen as irregular market behavior.

MediPost also ended the day up 13% at 11,600 won. The gain comes as the company prepares to submit an Investigational New Drug (IND) application for a U.S. Phase 3 clinical trial of its umbilical cord blood-derived stem cell therapy “Cartistem” later this year. The trial could begin by late 2024 or early 2025.

Lastly, GC Genome, a genetic testing affiliate of GC Pharma, closed its first day on the Kosdaq market with a 5.71% gain at 11,100 won slightly above its IPO price of 10,500 won. The stock had briefly surged 44.57% during intraday trading before giving up most of its gains.

GC Genome currently provides over 300 genetic testing services to more than 900 hospitals and clinics.