Hanmi Pharmaceutical has been under fire after delaying an announcement of its German partner returning a license on a new lung cancer drug.
The unfavorable news came 29 minutes after the market opened Friday last week, and after the firm’s stock price spiked nearly 5 percent on a disclosure made Thursday that the company clinched a 1 trillion won deal with Genentech, a member of Roche Group.
At the news of the departure of Boehringer Ingelheim, investors short-sold as many as 104,327 shares of the pharma company. Hanmi’s share price continued to plummet 7.28 percent at 471,000 won on Tuesday, the first market day after a three-day holiday last week.
The stock value of other drugmakers including JW Pharmaceutical and Boryung Co. plunged 15 percent and 2.62 percent, respectively.
Market analysts warned investors to stay cautious on the progress of Hanmi shock, citing the company’s leading status in the bio market.
Hanmi Pharmaceutical is one of big bio firms along with Celltrion and Samsung BioLogics, that have been leading the recent craze on the sector. The market response has been explosive, after the firm clinched a number of technical transfers with global drugmakers worth a multi trillion won. But, most of the drugs which have been licensed out have yet to reach commercialization overseas.
The Hanmi case may have exposed the risks of investors betting big on bio firms, not judging from market fundamentals or actual outcome, but based on vague expectation, watchers said.
“We have learned about the difficulties with developing new drugs from the termination of contract between (Boehringer Ingelheim) and Hanmi Pharmaceuticals,” said Bae Ki-dal and Lee Ji-yong, analysts at Shinhan Investment and Securities in a joint report.
“Developing new drugs requires a long period of time. So rather than having a vague expectation, (investors) need to have a realistic standpoint.”
By Cho Chung-un/The Korea Herald (firstname.lastname@example.org)