The government's recent ban on short selling raised expectations about the stock price rise among biopharmaceutical companies.
However, the share prices of Kosdaq-listed bio company Altheogen have plummeted recently, raising questions and forcing it to issue a statement to calm the market’s jitters.
On Wednesday, Altheogen's stock price dropped by 20 percent at one point during the midday trading. After closing at 70,600 won ($54) on Tuesday, Altheogen's stock price rose on Wednesday morning but suddenly plunged to 52,400 won just before noon.
That marked a 25.78 percent drop on Wednesday from the previous day's close. Later in the day, Altheogen shares restored the 60,000 won mark and closed at 65,500 won.
Altheogen issued a short statement on its website in response to the sudden drop in shares.
"We have received many inquiries regarding today's share price decline, and we would like to explain it through an announcement," the company said. "It has nothing to do with the company's fundamentals, and the company is cruising as planned."
Wednesday was also the day when the company held a meeting with its shareholders to explain the status of its business. It held a meeting with about 30 shareholders at 3 p.m. in the seminar room on the first floor of Korea Investment & Securities in Yeouido, Seoul.
Alteogen also said CEO Park Soon-jae, originally scheduled to host the on Nov. 1, could not attend the meeting due to other schedules. Alteogen said it would arrange another occasion for Park to explain in person as soon as possible.
During the Wednesday meeting, Alteogen conveyed its assurance in ongoing technology transfers, highlighting that clinical trials for SC (subcutaneous injection) formulations with partners like Merck (MSD), Sandoz, and Intas are progressing as planned.
Alteogen possesses the proprietary human recombinant hyaluronidase (ALT-B4) technology and has established technology transfer agreements with partners keen on developing Keytruda (pembrolizumab) or biosimilars in subcutaneous (SC) formulations. The success of these products in the commercial market is anticipated to yield substantial milestone payments.
"Merck plans to launch Keytruda SC in 2025 to defend against biosimilars," said Hyundai Motor Securities analyst Uhm Min-yong in his report in September. "If Alteogen transfers its Keytruda SC biosimilar technology to a competitor, Merck may need to change the agreement to an exclusive one, as it will significantly damage sales."
Depending on the sales targets, the cumulative milestones received by Alteogen could be in the trillions of won, Uhm said. Assuming annual sales of 20 trillion won for Keytruda SC, which is in line with peer group Halozyme's 2-5 percent royalty agreement, Alteogen could achieve the largest sales among Korean biotech companies, he added.
More recently, the company has been in the spotlight due to reports that its founder and CEO, Park, plans to sell Alteogen to MSD.
However, the company didn’t elaborate, saying, “Many recent issues are not based on facts."