South Korean biopharmaceutical firm Celltrion’s shares rose high in the local stock market, which resumed trading on Oct. 10 after a long holiday break.
The company decided to move from tech-heavy Kosdaq to the main bourse Kospi at a meeting of shareholders on Sept. 29, just one day before the beginning of the holiday. Immediately after the stock market opened on Oct. 10, its shares soared. After the market closing, shares of Celltrion Pharm, a subsidiary of Celltrion, were classified as “overheated stocks” due to an excessive increase in short-sale transactions.
Celltrion Pharm, which sells Celltrion products at the home market, saw its shares rocketing 27.27 percent, or up 5,100 won, to close at 23,800 won ($21) Tuesday. Celltrion Healthcare, conducting worldwide marketing and sales, also rose 8.11 percent to close at 60,000 won on the same day.
Some observers said the recent remark by Celltrion CEO and cofounder Seo Jung-jin that he was willing to make Celltrion Pharm aggressively tap the global generics market, in an interview with local media at the latest shareholders’ meeting, triggered the buying of Celltrion Pharm shares.
Celltrion Pharm not only deals with the domestic sales of biomedical products but supplies composite biomedical products from factories in Jincheon and Ochang, North Chungcheong Province. The Ochang factory, in particular, has an advanced manufacturing facility for the global market, certified by the U.S. FDA’s Current Good Manufacturing Practice (cGMP), the company said.
Celltrion Pharm’s move to leap forward to a “global pharmaceutical firm” will soon to realize, observers said. Celltrion’s latest decision to move to Kospi prompted Celltrion Pharm shares to jump on Kosdaq. With Kosdaq-listed Celltrion moving on to the main index, investors in growth-targeting funds in Kosdaq will allocate more of their assets in Celltrion Pharm, they said.
“Funds that invest in Celltrion on Kosdaq will see their investment going nowhere due to Celltrion’s moving to Kospi. Then, institutional investors may move their funds to Celltrion Pharm,” a source in the securities market said.
“Individual investors were not very well aware of Celltrion Pharm, compared to Celltrion or Celltrion Healthcare. But, with the growth of Celltrion Healthcare, their attention on Celltrion Pharm is rising,” he said.
Amid the increased investor attention, Celltrion Pharm’s transaction volume quickly rose to 4.17 million shares on Oct. 10, from 115,268 shares on the previous trading day. Some raised concerns that the recent rise in Celltrion Pharm’s shares might have resulted from speculative trading.
Designated as "overheated," Celltrion Pharm’s shares were banned from short selling for one day on Oct. 11. A short sale refers to selling borrowed stocks and repurchasing them in anticipation for a price decline. The Korea Exchange designates overheated shares based on the volume of short-sale transactions and the proportion of them among total transactions.