The shares of HLB kept plunging on Wednesday after the company admitted that the financial authorities are investigating whether it arbitrarily interpreted and falsely disclosed phase 3 clinical trial results of its anticancer drug, Rivoceranib.

HLB shares fell 6.02 percent from the previous day to 62,500 won ($56) per share at closing. It was a drop for the second consecutive day after plunging 27.24 percent on Tuesday.

The company's market capitalization also fell from third place (4.85 trillion won) to ninth place in the Kosdaq market by losing 1.55 trillion.

The company's shares started to plunge on Tuesday after Chosun Biz, a local news outlet, reported that the Financial Services Commission (FSC) had completed a deliberation on HLB for falsely disclosing the results of a U.S. phase 3 trial of Rivoceranib in November last year.

The FSC concluded that the pharmaceutical company had arbitrarily interpreted the results, based on a U.S. Food and Drug Administration (FDA) document that evaluated the research as a failure.

In June last year, HLB acknowledged that it might be difficult to apply for FDA approval as the clinical trial did not reach the primary endpoint it had originally targeted. However, the company quickly changed its position in September. It announced that Rivoceranib had received approval to conduct global phase 3 clinical trials, and that it was taking steps to go through the new drug approval process.

With investors demanding an explanation from the company, HLB chairman Jin Yang-gon admitted on Tuesday that the company was under investigation by FSC.

"The FSC indeed investigated the company for false disclosures, and HBL is about to undergo a review by the Securities and Futures Commission," Jin said. "However, nothing has been decided yet."

Jin also explained why the company changed its stance last year.

"At the time, the company announced that there could be a delay or difficulties in the applying for new drug approval (NDA) due to the failure to secure statistical significance for overall survival, the primary endpoint, in the U.S. phase 3 clinical trial," Jin said. "After compiling the data, however, we thought although we did not reach our primary endpoint, the results were excellent and was told that we might be able to apply for a new drug approval."

Jin also stressed that he did not hide the FDA's fail grade as he had already revealed it in June 2019.

"The FDA had also advised supplementing the data for the actual NDA," Jin said. "However, due to the global Covid-19 pandemic, we have not been able to secure all of the supplementary documents for the NDA."