UPDATE : Thursday, August 13, 2020
Bio stocks listed under ‘tech exception policy’ perform better
  • By Nam Doo-hyun
  • Published 2018.10.15 12:27
  • Updated 2018.10.15 12:27
  • comments 0

Biotech and medical companies that went public under the Korea Exchange’s “technology exception policy” performed better on the KOSDAQ market than their peers that underwent the general listing procedure. The policy allows easier listing for firms with technological growth potentials.

The better stock performance of the government-supported biotech firms brushed off concerns that the financial regulator might fail to protect investors if their stock prices plummet.

Five out of 10 biotech and medical companies debuted on the tech-laden KOSDAQ with the help of the technology exception policy as of July.

While the five firms with the state support had their stock prices inch down only 1 percent on average as of the end of July compared to the closing price of the initial public offering (IPO) day, the other five suffered 46 percent fall on average during the same period.

The five firms with the technology exception policy are Enzychem Lifesciences, Osteonic, Eone Diagnomics (EDGC), Icure Pharm, and Olix Pharmaceuticals.

The other five listed with the general listing procedure are Arlico Pharm, Dongkoo Bio & Pharma, CareLabs, Genoray, and Sejong Medical.

Among the 10, Enzychem Lifesciences and Olix were the only firms whose stock prices on Friday were higher than those on the IPO day. Enzychem produces antibiotics, and Olix develops drugs based on the RNA interference platform.

Enzychem’s stock price rose 20 percent to 102,600 won ($90.6) on Friday from 85,200 won on the IPO day. Olix shares went up 8 percent to 70,700 won from 65,600 won over the cited period.

When comparing shares on Friday with those on the offering prices, Olix had the most significant gain, surging 96 percent from 36,000 won to 70,700 won. Enzychem followed with 83 percent growth from 56,000 won to 102,600 won.

Dongkoo Bio & Pharma climbed 55 percent from 16,000 won to 24,800 won, followed by Arlico Pharm with 16 percent from 12,000 won to 13,950 won, and CareLabs with 15 percent from 20,000 won to 23,050 won.

The stock gains of the 10 biotech and medical firms were lower than those of the non-biotech/medical companies that had IPO on KOSDAQ this year.

Thirteen companies that joined KOSDAQ in the non-biotech/medical sector had their stock prices going up 43 percent as of Friday, compared to the offering prices.

“The Korea Exchange has been steadily improving the technology exception policy,” said an analyst. “Some critics point out the government does not have clear criteria to assess new business models such as Bridge Bio, a No Research Development Only (NRDO) firm. But it is also true that the regulator’s review for a new listing has become stricter.”


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