Biotech shares are staggering due to a spate of unfavorable factors involving Samsung BioLogics Co. and Kolon TissueGene Inc. Investors have lost confidence in domestic biotech companies as a whole and are turning away from them.
Samsung BioLogics, a biopharmaceutical unit of top South Korean conglomerate Samsung Group, closed at 298,000 won (US$254.16) on the benchmark KOSPI market on May 8, down 7.74 percent from a day earlier. It started lower and fell below 300,000 won (US$255.86) in the end. This came following the news reports that prosecutors investigating accounting fraud allegations against the company secured additional evidence that had been hidden under the floor of a company factory in Songdo, Incheon, on the previous day. Its stock price hit the lowest of the year with its market cap dropping to some 19 trillion won (US$16.20 billion), with suspicion growing that the firm tried to destroy evidence ahead of the Financial Supervisory Service’s special inspection and prosecution investigation.
The share price of Kolon TissueGene, which is embroiled in the Invossa scandal, also continued to be bearish for three trading days in a row. It fell to the floor by 29.72 percent on May 7 and closed 3.96 percent lower again on May 8. It started lower and rose by more than 9 percent with strong low-price buying during mid-day trading but it fell again, with institutions going on a selling spree.
Kolon Life Science Inc., the holding company of Kolon TissueGene, saw its stock price decrease during mid-day trading but it closed 2.78 percent higher.
With growing suspicions over Samsung BioLogics and Kolon TissueGene, investors’ confidence in biotech shares as a whole is shrinking. The medicine index on the main KOSPI fell by 2.65 percent and the pharmaceutical index on the secondary KOSDAQ dropped by 1.1 percent on the same day.
In particular, the share prices of firms ranked high on the KOSPI and the KOSDAQ markets show a weak tendency. Celltrion Inc. closed steady on the KOSPI on May 8, while Hanmi Pharmaceutical Co. closed 2.06 percent lower. In addition, the stock prices of top 10 companies in terms of market cap on the KOSDAQ market all dropped. Celltrion Healthcare Co. fell by 0.81 percent, SillaJen Inc. 2.71 percent, Helixmith Co. 3.42 percent, Medytox Inc. 1.66 percent and Celltrion Pharm Inc. 1.36 percent.