The suspension of trading of Samsung BioLogics shares did not have a much negative impact on the investment sentiment in the stock market on Thursday.
The Securities and Futures Commission under the Financial Services Commission ruled on Wednesday that the contract drugmaker intentionally violated accounting rules to inflate the company’s value before the initial public offering in 2016. The regulator suspended the trading of Samsung BioLogics and fined 8 billion won ($7 million).
Some analysts had forecast that the investment sentiment could almost “freeze.”
“Some reports had said the results of the review on Samsung BioLogics’ accounting could have a significant impact on the stock market, although the degree would be smaller than the one when biotech firms’ capitalizing R&D expenses became an issue,” an official at a securities firm said. “We will have to wait and see, but the suspension didn’t seem to have hurt the investment sentiment in the biotech industry as much as previously expected.”
On the main bourse KOSPI, 21 out of the major 46 pharmaceutical and biotech stocks gained Thursday from the previous day, except for Samsung BioLogics. Twenty-three companies had a decline, and the other two remained unchanged.
Daewon Pharmaceutical, which suffered the steepest fall among the 46, had only a 3.15 percent drop in the stock price.
On the secondary KOSDAQ, 31 out of the major 54 pharmaceutical and biotech shares had a daily rise on Thursday. None of the 23 companies that had a decline in stock price suffered a double-digit fall.
Only two companies -- Sinil Pharmaceutical and LegoChem Biosciences -- saw shares plunge more than 5 percent.
Biotech industry officials said the debacle of Samsung BioLogics should not kill the R&D spirit of new drug developers.
“Biosimilars can’t survive for more than five years, but people treat them like they are the mainstream. This seems to be wrong, as a new drug developer,” an official at a biotech company said. “The controversy over Samsung BioLogics should not affect companies that develop new medicines, not biosimilars.”
A government official in charge of biotech policies, who wished to be unnamed, said he saw the case of Samsung BioLogics as a moral issue, not a technical problem. “This is something the financial regulator should judge over accounting rules. This should not have an impact on healthcare policies,” the official said.
The issue of Samsung BioLogics will not make its parent group Samsung to give up biotech business, he went on to say. “I hope that Samsung, as a conglomerate, could start investing in innovative drugs, not biosimilars,” the official added.