Biotech companies developing new drugs are plagued by rumors that adversely affect investor sentiment.

Faced with a series of speculations about the equity sale by the largest shareholders and plans for a capital increase, SCM Lifescience, ABL Bio, NKMAX, and Genome & Company have responded with official statements for clarification.

Last Friday, SCM Lifescience officially denied the merger and acquisition (M&A) speculation raised by a media outlet with a public notice on its website.

"The current management has not considered any sale of the shares of the largest shareholder, Song Ki-ryong, nor has the largest shareholder made any attempt to sell her shares," SCM Lifescience said in the announcement. "It is a well-known fact that the current management is pursuing deferred payment of inheritance tax to maintain the shareholding of the largest shareholder and that the current management is doing its best to generate results."

It added that there was no such discussion at the board meeting on Feb. 14.

"The alleged sale of shares related to the change of control without the knowledge of the company's management and largest shareholder will negatively affect the trust in the company, which will ultimately lead to the loss of shareholders," the company said, adding that it will actively contact the largest shareholder to find out whether the share sale has occurred, and then take legal action against rumor spreaders and file a report with the Financial Supervisory Service.

SCM Lifesciences underwent an inheritance process after the sudden death of its largest shareholder and CEO, Song Sun-uk, in 2022. Song's wife, Director Song Ki-ryong, is now the largest shareholder with an equity stake of 17 percent (3,479,744 shares). On June 26 last year, she deposited 1,456,890 shares she had held for deferred inheritance tax payment with the National Tax Service.

Peptron and ABL Bio have also made announcements to resolve turmoil after their stock prices fell amid rumors of disruptions to their business plans.

"At this time, the company is executing its planned activities and is not aware of any other anomalies or issues," Peptron said in a notice titled "Dear Shareholders" on its website on Tuesday.

The company said it recognized that the drop in share price has caused anxiety among its shareholders, apologizing for the miscommunication. It reiterated its employees' commitment to achieving the best possible outcome.

ABL Bio also addressed the rumors in an announcement on its website on Feb. 8. The company’s business is progressing smoothly, including the ongoing pipeline development, the company said, noting that clinical data for ABL503, ABL001, ABL202, and ABL105 will be released within the year.

"We will continue to strive to be an even better company," it said. "Rather than focusing on rumors that may be unnecessarily derived from stock price fluctuations, please follow the company's vision and the progress we are making to achieve it."

Gnome & Company also responded to rumors of a shareholder rights offering last month, saying, "We have never discussed a shareholder rights offering with any securities firm since our listing, and we have no plans to do so now."

In the case of NKMAX, Park Sang-woo, the founder and largest shareholder, lost most of his stake in the company in a counter-sale by creditors, raising concerns about a management vacuum. Park and NKMAX employees have stated that they would strive to normalize the company's operations.

On Jan. 30, Park stepped down as the largest shareholder of NKMAX. According to the Financial Supervisory Service's electronic disclosure system, NKMAX disclosed the change in its largest shareholder, stating that Park's shareholding decreased from 12.94 percent (10,726,418 shares) to 0.01 percent (5,318 shares).

The change in the largest shareholder was "the largest shareholder's intraday sale and execution of the pledge right of the pledged shares (counter sale).” Market watchers presumed that the debenture holder executed a counter-sale as the collateralization ratio was lowered due to NKMAX's stock price decline on Jan. 24.

On Jan. 31, NKMAX posted a statement on its website regarding the counter-trade. "I apologize for the great confusion and anxiety caused to shareholders who have invested in the company," he said, acknowledging that the counter-sale of his shares caused the stock price to drop significantly and that the largest shareholder was absent.

Vowing to find a way to stabilize the governance structure as soon as possible," Park said, "I will attract strategic and financial investors who believe in the company's technology and potential and take responsible management as the largest shareholder."

Regarding concerns about a management vacuum, NKMAX executives and employees said, “There will be no management chaos. The business is proceeding as planned, and we can show tangible results soon."