Genome & Company, which has recently experienced a slump in its stock price, has responded to rumors about increasing its paid-in capital.

"We would like to apologize for the recent drop in our stock price first and clarify the exact situation facing the company amid various rumors due to the drop in stock price," the company said in a letter to shareholders posted on its website.

Acknowledging that the company has received inquiries regarding rumors of a shareholder rights offering, Genome & Company intends to provide a clear answer through the post. "A shareholder rights offering can be conducted through a securities company IB, and we have never discussed a shareholder rights offering with any securities company since our listing and have no plans to do so at this time," it said.

As of the third quarter of last year, Genome & Company had about 30 billion won ($22.5 million) in cash, the company explained. In addition, the U.S.-based microbiome contract development and manufacturing (CDMO) subsidiary valued at 54 billion won that Genome & Company acquired in 2021, and the additional subsidiary the Korean company established for its CDMO business also had about 11 billion won, and 56 billion won in cash as of the third quarter disclosures, it noted.

"We plan to secure future R&D expenses through our revenue-generating business and license-out deals. In addition, we have carefully reviewed conditions for maintaining our listing and found no issues," it said.

The company also clarified that the recent share price decline was unrelated to the release of cutoff data from its phase 2 trial of GEN-001, a microbiome immuno-oncology therapy for gastric cancer.

"We presented a poster on our phase 2 cutoff data for GEN-001 in gastric cancer at the American Society of Clinical Oncology Gastrointestinal Cancer Symposium (ASCO GI 2024) on Jan. 18 (local time) and held an online press conference at 9:30 a.m. on Jan. 19 (Korean Standard Time) to further explain the data presented in the poster, and uploaded the video to our YouTube channel," the company said.

It went on to say, “On the day of the poster announcement, our stock price dropped by 12.84 percent. When we closely examined the reasons for the drop, we could not find any reason other than supply and demand issues caused by foreign selling. It is difficult to interpret the disappointment in the data as a reason for the decline because data on 37 patients had already been published in the abstract on the morning of Jan. 17, and the stock price fell from 9:01 a.m. after the online press conference and before the time of the press release (10:25 a.m.)."

“In addition, as stated in the news release, the opinions of the clinical director and other experts on the phase 2 cutoff data for GEN-001 in gastric cancer were that it is the first clinical study to demonstrate the potential for treating gastric cancer with a microbiome drug, that it confirms a synergistic effect beyond the existing PD-L1 immuno-oncology monotherapy, and that it confirms an objective response rate of 37.5% even in PD-L1-positive patients who have failed previous immuno-oncology treatments, which is positive enough to proceed with further clinical trials for drug development," it said.

In addition, Genome & Company emphasized that it is developing microbiome therapeutics and novel targeted cancer drugs based on genomic analysis and emphasized that it is committed to recognizing the value of its microbiome therapeutics as well as the value of its novel targeted cancer drugs and ADCs.

"We sincerely apologize to our investors for the decline in our stock price, and we will do our best to identify the problem as soon as possible and resolve any misunderstandings in the stock market so that we can restore our stock price to its full value," Genome & Company added.

On Thursday, Gnome & Company's stock price closed at 9,400 won, down 6 percent (600 won) from the previous day's closing price of 10,000 won.