ToolGen, a local biotech firm specialized in gene editing, has been mired in a controversy after a news report said the company illegally obtained patents for gene editing tool called CRISPR-Cas9. Industry watchers are paying attention to whether the issue would negatively affect the financial regulator’s review for ToolGen’s KOSDAQ listing later this year.
Kim Jin-soo, director of the Center for Genome Engineering at the Institute for Basic Science (IBS) and former Seoul National University professor, is the largest stakeholder of ToolGen.
However, the Hankyoreh daily newspaper reported on Sunday that Kim unfairly diverted patents, developed with Seoul National University and funded by the government for the gene editing research, to ToolGen.
Although the company immediately refuted the news report saying the transfer of patents was a legitimate procedure, ToolGen shares plummeted by a daily limit of 15 percent on KONEX, Monday.
Sources said the latest controversy might damage the company’s plan to move to the secondary KOSDAQ market from the small-cap-only KONEX.
ToolGen applied for a preliminary review for KOSDAQ listing to the Korea Exchange on Aug. 17, under the so-called “Tesla standards,” an eased listing rule for promising companies that have failed to post significant profits.
However, the Korea Exchange (KRX) said it would hold the decision on ToolGen until it can confirm all the facts about the recent patent controversy.
“Under the Tesla standards, we can exempt quantitative qualifications. But the latest issue will affect the quality review. Our assessment will check all the facts regarding the controversy,” said an official at the KRX.
ToolGen’s gene-editing patents are registered in Korea, Australia, and Europe.
“The recent patent controversy is expected to affect ToolGen’s KOSDAQ listing negatively. The regulator’s review on patents is one of the significant factors in a listing,” said an analyst at a brokerage.
According to ToolGen, the company hopes to be listed on KOSDAQ in December this year.
The company is the largest KONEX-listed company with 686.2 billion won ($607.7 million) in market cap. It will be the first biotech firm to be listed on KOSDAQ if the plan goes as scheduled.
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