"We will cancel the 250 billion won block deal (large-lot sale) itself that is the basis of the rumor about a cash-out at the peak."
Jeon In-seok, CEO of Sam Chun Dang Pharm, said this at a Sam Chun Dang Pharm press conference held in Seocho-gu, Seoul, on the afternoon of the 6th. Sam Chun Dang Pharm's share price soared on expectations for an oral insulin and a generic of Wegovy. Jeon disclosed a plan to sell 250 billion won worth of equity citing tax payment when Sam Chun Dang Pharm's share price surged, then canceled it on this day.
Previously, Shin Poong Pharm and SillaJen also each saw their share prices surge on expectations for the development of a treatment for COVID-19 and an anticancer drug, only to plunge after major shareholders sold equity. As investors voiced concerns that such cases might repeat, it appears the equity sale plan was withdrawn.
Jeon said, "Last year, from Chairman Yoon Dae-in of Sam Chun Dang Pharm, I and my spouse each received 3.41% equity, and the taxes we have to pay total 233.5 billion won," adding, "We planned to carry out a 250 billion won block deal and use the remaining amount to buy the company's shares again."
He said, "The market reaction was devastating, and there were rumors that we had staged a scam," adding, "Because protecting Sam Chun Dang Pharm's pride and shareholder value is more important than paying personal taxes, I decided to cancel the block deal." He emphasized, "We will pay the taxes through methods such as a share-collateral loan rather than a block deal."
Sam Chun Dang Pharm is developing oral insulin with its in-house platform technology S-Pass. Diabetes patients currently inject insulin, but if this technology succeeds, they will be able to control blood sugar with a pill. Sam Chun Dang Pharm applied for approval of a clinical trial plan with the European Medicines Agency on the 19th of last month, and approval has not yet been granted.
The generics of oral Wegovy and Rybelsus (a diabetes drug) were disclosed on the 30th of last month as having signed a contract in the United States. The company said that under this deal it will secure 90% of product sales revenue for the next 10 years. It did not disclose the counterparty. Right after the disclosure, the industry reacted that the profit-sharing terms were unusual.
Jeon explained that S-Pass and the oral obesity drug candidates have been recognized by global regulators such as the U.S. Food and Drug Administration (FDA). In that regard, he disclosed documents submitted to the U.S. FDA and said, "S-Pass has a patent number, and oral semaglutide (the active ingredient of Wegovy) received generic (ANDA) language."
Jeon said, "There are rumors that the S-Pass technology is fake and has no patent," adding, "These are officially submitted documents to the U.S. FDA and the European Medicines Agency." He said, "How could we proceed with administrative procedures at stringent overseas regulators such as the U.S. FDA and the European Medicines Agency with fake technology that has no substance?" adding, "In particular, to apply for clinical trials at an agency like the European Medicines Agency, the detailed patent particulars of the drug and the original manufacturing method must be specified."
He added, "There are opinions asking why we do not disclose the (U.S. deal) partner or patent-related information," saying, "To preemptively capture the market by avoiding the originator's formulation patents, it is difficult at this stage to expose the partner or patent-related information." He explained further, "You cannot open up our side to the enemy."
He said, "Sam Chun Dang Pharm is not merely a company that exports technology but a pharmaceutical company that supplies products," adding, "We are neither Samsung nor Celltrion, but we want to prove that even a mid-sized Korean pharmaceutical company can stand shoulder to shoulder with giants in the global market if it has proprietary technology."
Jeon emphasized, "We will make 'Korea's Novo Nordisk, Eli Lilly and Company' modifiers that can describe Sam Chun Dang Pharm," adding, "Within the bounds that do not undermine strategic security, we will transparently share information (with shareholders) going forward."