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Stock declines, negative rumors haunt biotech industry

So Jae-hyeon  Published 2018.07.23  16:39  Updated 2018.07.23 16:39

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The local biotech industry is struggling with negative rumors on leading firms, not long after Samsung BioLogics’ accounting issues dealt a massive blow to the whole sector.

Rumors are circulating that SillaJen may suspend clinical trials on Pexa-Vec after several senior executives, including Vice President Ji Sung-kwon, left the company.

Aware of the rumors, SillaJen released a statement on Monday to reaffirm that the company’s all pipelines including Pexa-Vec in phase-3 trials are going on smoothly.

“We are operating the Independent Data Monitoring Committee (IDMC) to block unfair external and internal pressures and expedients completely, and to determine only the objective efficacy of Pexa-Vec in phase-3 trials,” the company said.

According to SillaJen, the IDMC is comprised of eight oncologists from the U.S., Italy, Taiwan, and Switzerland, who have exclusive access to the data on Pexa-Vec in the phase-3 study. Even high-ranking executives of the company cannot check the study results in advance, the company said.

“If the IDMC finds that a concerning issue occurs in the clinical trial and puts up a notice of a suspension of the study, anyone can check it through the U.S. clinical trial database. This means that we cannot hide any issue,” SillaJen added.

There are also gossips around Reyon Pharmaceutical and ViroMed, which have been fighting a patent legal battle over VM202, a gene therapy to treat diabetic neuropathy.
The two used to be development partner firms but have been engaging in the fight since late last year.

Recently, the two released a statement, respectively, to provoke each other.

ViroMed said, “We would like to congratulate Reyon Pharmaceutical on realizing large profits through selling ViroMed stocks. This seems to have given a little compensation to the late chairman Yoo Sung-rak.”

In response, Reyon said, “We congratulate ViroMed on securing production facilities to self-supply materials for clinical trials. Please complete the clinical trials under contract as soon as possible.”

After a heated exchange of words, investors are speculating that the two companies might engage in a lawsuit again or that a new raw material supplier will be selected.

Celltrion is also not free from malicious rumors about its prospect for entry into the U.S. market.

“We’re doing our best to return profits to our investors, but there are so many ill-intentioned rumors that are far from facts,” said an official at an investor relations department at a biotech firm. “For example, if an executive retires, people gossip that the person might be taking the responsibility of a certain result of a project, even though the retirement was due to the expiration of the term.”

The official went on to say that the biotech industry did not have a good capital flow.
“The problem is that malicious rumors spread quicker than the companies’ speed of research and development. So we’re seeking ways to protect investors from being damaged due to groundless rumors,” he said.

sjh@docdocdoc.co.kr

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