PharmAbcine, a bio corporation once considered a promising candidate for domestic antibody new drug development in the KOSDAQ market, will be delisted.
The Korea Exchange announced on the 27th that it has decided to revoke PharmAbcine's listing after holding a KOSDAQ Market Committee meeting. The delisting date is June 11. A consolidation trading period will begin on June 29 and last until June 10 for seven trading days.
The exchange noted that after comprehensive consideration of the corporation's continuity and management transparency, it was deemed to meet the delisting criteria. Last month, the company submitted an improvement plan implementation report to the Korea Exchange but it was not accepted in the final review.
Established in 2008, PharmAbcine is a specialized new drug development company for antibody therapies and entered the KOSDAQ through a technology special listing in 2018. The technology special listing is a system that allows listing on the KOSDAQ and KONEX markets if the innovation of technology is recognized, even if it is not generating profits.
The founder and Vice President, Yu Jin-san, majored in molecular genetics at Georg-August University in Germany and established the company after conducting cancer drug research at the former LG Life Sciences. PharmAbcine possesses various multi-antibody manufacturing technologies based on a human antibody library of over 100 billion. Although recognized for this technology and potential, it faced difficulties due to the suspension of core pipeline (new drug candidates) development, deficits in management, and challenges in securing funding.
First, the clinical trials for the core pipeline antibody new drug candidate "Olinvosimab" have been repeatedly halted, raising market concerns.
After discontinuing Phase 2 clinical trials for recurrent glioblastoma (rGBM) in the U.S. and Australia in 2022, the company also voluntarily withdrew from a clinical trial in Australia involving Olinvosimab and Merck's (MSD) Keytruda for metastatic triple-negative breast cancer (mTNBC) last year.
The company stated, "Patient recruitment was difficult, and due to concerns over prolonged research, we decided to terminate the trial early." This meant focusing on other ongoing research rather than continuing with limited personnel and expenses.
In the meantime, the financial situation also worsened. PharmAbcine failed to meet the annual revenue requirement of 3 billion won five years after its technology special listing, and its continuing business losses before corporate tax exceeded the threshold of 50% three years later. Attempts to secure funding were not easy.
The company decided on a 30 billion won third-party allocation of new shares in June 2023, but received a penalty of 11 points due to disclosures regarding payment of the capital increase for PharmAbcine Diamond Club Co-Growth Equity No. 1 Fund and Yukon Partners.
In December of the same year, PharmAbcine attempted to secure funds through a capital increase of 30 billion won targeting former CEO Choi Seung-hwan and HP Bio, but it was withdrawn as they failed to make the payment. As a result, cumulative penalties exceeded 15 points over the year, leading to a substantial review basis for the listing eligibility.
In December 2023, PharmAbcine's largest shareholder changed from founder Yu Jin-san to Tire Bank. Kim Jong-kyu, chairman of Tire Bank, acquired PharmAbcine's equity by investing 8.55911 billion won of his own funds, thus taking control of management. While there were expectations for management normalization, notable achievements in the market did not follow.
Previously, PharmAbcine added the sale of automotive tires and parts as a new business objective as part of its efforts to improve profitability, and also carried out a small merger with its subsidiary, Good Tire. However, there were limitations to financial improvement.
In 2024, PharmAbcine's revenue is expected to be 3.88855 billion won, with an operating loss of 7.713 billion won and a net loss of 4.924 billion won. Last year's research and development expenses were about 5 billion won, which is 129% of the revenue. The total capital is 47.3 billion won, and the total liabilities are 17.2 billion won, indicating a relatively low debt ratio but still unable to escape the risk of delisting.
The Korea Exchange decided to delist PharmAbcine after the review and resolution of the KOSDAQ Market Committee in July last year. PharmAbcine filed an objection in August of that year and was granted a grace period, but it ultimately failed to pass the review of the improvement plan implementation report, leading to the final decision to delist.
Yu Jin-san, founder and vice president of PharmAbcine, said, "The decision by the KOSDAQ Market Committee to delist has come as a shock, and for the past 17 years, the company has never faced matters such as refusal of audit opinions, breach of trust, or embezzlement, and as of the 27th, we have nearly 50 billion won in cash assets."
Despite this, Vice President Yu believes that the exchange decided to delist because the technology transfers included in the improvement plan were not implemented. He stated, "We are diligently conducting clinical trials to transfer existing pipeline technologies. If PharmAbcine is considered a zombie corporation and must be delisted, many domestic bio companies could face the same fate, which could lead to the extinction of the Korean bio ecosystem."