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Market value of biopharmaceuticals drops ₩10 trillion on 'Black Monday'
  • By Lee Han-soo
  • Published 2019.08.06 13:50
  • Updated 2019.08.06 16:52
  • comments 0

Biopharmaceutical shares in the nation’s secondary bourse had their worst day this year on Monday.

The industry saw about 10 trillion won ($8.2 billion) of its market value evaporate reeling from a recent series of bad news, such as the U.S.-China trade dispute, Japan's export regulations against Korea, and Sillajen's clinical trial suspension.

According to the Korea Exchange, the Kosdaq market closed at 569.79, down 45.91 points, or 7.46 percent, from the previous trading day, falling through the 600 point mark in two years and eight months.

The KRX announced a five-minute "sidecar," a restraining measure designed to counteract wild market fluctuation, but failed to stop the decline. The activation of the sidecar on Monday was the first time since June 24, 2016.

One of the most significant factors that pulled down the index were unfavorable factors in the bio-industry.

Most recently, Sillajen, one of the Kosdaq-listed biotechnology companies, announced that it was advised to stop clinical testing for Pexa-Vec by the Independent Data Monitoring Committee (DMC) last Friday. The company's shares plummeted and hit the lower limit for two consecutive trading days. During this period, the market capitalization of the company decreased from 2.2 trillion won to 1.5 trillion won.

Sillajen's fall affected other biopharmaceutical companies in the stock market.

Major bio-companies such as Celltrion Healthcare (-9.50 percent), Celltrion Pharmaceuticals (-11.88 percent), Alteogen (-20.15 percent), Huons (-11.08 percent), JW Pharmaceutical (-14.15 percent), Medytox (-19.07 percent), Helixmith (-17.36 percent), and Genexine (-12.23 percent), fell sharply that day, replacing the low price mark in the past 52 weeks.

The KRX Health Care (KRXHLTH), which consists of 73 major biopharmaceutical stocks selected by the exchange, also recorded its biggest loss this year and the steepest decline of all industries after by dropping down 10.67 percent from last Friday and ending at 2,314.3 won, on Monday.

Seventy-one stocks of the 73 KRXHLTH-listed firms fell. Their total market capitalization also shrank from 98.6 trillion won to 88.8 trillion won, losing 9.5 trillion won in one day.

The biopharmaceutical-driven slump in the nation's secondary bourse has become a recurring trend over the past few months, as the entire Kosdaq market has been faltering every time there is an unexpected upheaval in the bio-industry, including the discontinuation of HLB's clinical trial of rivoceranib for gastric cancer and the revocation of Kolon Tissuegene's Invossa-K approval.

All this is primarily because a large portion of tech-heavy Kosdaq market is composed of pharmaceutical and biotech industries.

The aggregate value of listed biopharmaceutical stocks in the Kosdaq market had been on the rise over the past decade. The biopharmaceutical industry accounted for only 9.6 percent of the total Kosdaq market capitalization in 2010, but the share rose to 15.7 percent in 2014 and further increased to 26.5 percent in this past May.


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