Sam Chun Dang Pharm's headquarters in southern Seoul (Sam Chun Dang Pharm)
Sam Chun Dang Pharm's headquarters in southern Seoul (Sam Chun Dang Pharm)

Shares of Sam Chun Dang Pharm extended losses of more than 10 percent Wednesday after a rally that had pushed the stock to the top of the secondary Kosdaq lost momentum with investors, casting doubt on the sustainability of the gains.

The company’s shares closed daytime trading at 744,000 won ($495), down 85,000 won, or 10.25 percent, from the previous session. After opening at 760,000 won, the stock failed to rebound and continued to edge lower, even briefly touching the day's low of 713,000 won.

The drop follows the stock’s biggest permissible decline in the previous session, when it closed at 829,000 won, shedding 355,000 won, or 29.98 percent, in a single session.

The recent decline marks a sharp reversal from a rally that drove the stock to an intraday high of 1.23 million won on Monday, surging more than 400 percent from around 240,000 won at the start of the year.

Investor sentiment appears to have deteriorated after a recently announced US licensing deal for an oral insulin and weight-loss pill fell short of market expectations, as investors questioned the terms of the agreement. Sam Chun Dang Pharm also did not disclose the counterparty, an unusual move for a cross-border deal by a pharmaceutical company.

Adding to the pressure, the company has been facing stock manipulation allegations. Though it said it would pursue legal action over the claims, the controversy has continued to weigh on investor sentiment.

Even the bourse operator Korea Exchange said it may penalize the company for disclosure lapses after it failed to properly file its earnings in February.

The exchange cited the company’s failure to file an official disclosure regarding its earnings, noting that the information had only been released through a press statement on Feb. 6. A final decision is expected by April 23.

With the sharp decline, the company slipped to fourth place on the Kosdaq by market capitalization, behind battery material maker EcoPro, its affiliate EcoPro BM and biotech firm Alteogen, after briefly topping the ranking late last month.

Its market capitalization stood at 17.45 trillion won at the close of trading, shedding nearly 10 trillion won from its peak of 27.77 trillion won as of the March 30 close.


silverstar@heraldcorp.com