IT-CHEM, listed on Korea's KOSDAQ market, is facing a delisting crisis less than a year after its debut. The company drew attention by joining the production of raw materials for Eli Lilly and Company's obesity treatment "Mounjaro" (tirzepatide), but issues with financial credibility have tripped it up. Its planned expansion into bio raw materials is also expected to face setbacks.
On the 9th, the Korea Exchange (KRX) placed IT-CHEM on a delisting review list, according to industry sources. In the 2025 audit, the company received a disclaimer of opinion due to a scope limitation, and on the 3rd, after speculation spread that the audit opinion would be adverse or otherwise nonstandard, the exchange demanded a clarification filing and suspended trading.
Then on the 7th, the audit report officially confirmed the nonstandard opinion as a "disclaimer," putting the company at risk of delisting about eight months after its KOSDAQ listing in Aug. last year.
The company said it will promptly file an objection and undergo a re-audit, and will do its best to resume trading by reinforcing accounting and legal professionals and strengthening management transparency. The company plans to hold an extraordinary shareholders' meeting at 9 a.m. today to explain the reasons for the disclaimer of opinion.
At the heart of the delisting risk is financial transparency. The auditor, Uri Accounting Corporation, said it was unable to obtain sufficient evidence to assess the propriety of investments, construction payments, and other fund transactions. It means trust in the overall flow of funds and internal controls has been shaken.
Weak results compounded the problem. On a consolidated basis, last year's revenue was 61,966,970,000 won, up from a year earlier, but operating loss came to 1,850,840,000 won. Loss from continuing operations before income taxes was 16,522,810,000 won, and net loss was 14,330,230,000 won.
Investor confidence took a direct hit as the company swung to a loss from a profit the previous year and the audit opinion was finalized as a "disclaimer," triggering a delisting event within a month.
Another issue is that the company's business direction after a large-scale fundraise has diverged from what it presented at listing. In Feb., IT-CHEM issued 40,000,000,000 won in convertible bonds (CB). Of that, Timefolio Asset Management invested 25,000,000,000 won via a private fund, and a Europe-based asset management firm is also said to have invested 10,000,000,000 won.
The company said it would invest the funds in building a good manufacturing practice (GMP) plant to produce active pharmaceutical ingredients (APIs) based on peptide synthesis, and would move to produce APIs such as oral small-molecule peptide therapeutics.
Founded in 2005 as a precision chemical materials company, IT-CHEM grew on the back of organic photoconductor (OPC) materials for copiers and printers. It later expanded its business base by localizing transparent polyimide (CPI), a protective material for foldable smartphone displays. Recently, leveraging chemical synthesis and process technologies, it has been extending its business into pharmaceutical materials.
Drug production is largely divided into "raw materials" and "finished products." Among these, pharmaceutical intermediates are compounds needed before making finished drug products, a kind of "intermediate material" produced through multiple rounds of chemical synthesis.
In particular, it has drawn attention by joining the production of clinical intermediates for the development of a long-acting formulation of Mounjaro by the U.S.-based Eli Lilly and Company.
The key raw material for glucagon-like peptide-1 (GLP-1) class obesity treatments like Mounjaro is peptides. SK biotek produces these peptides, and IT-CHEM supplies the preceding intermediates.
In this process, in Dec. last year, it also signed a contract worth about 10,000,000,000 won with SK biotek for contract manufacturing of pharmaceutical intermediates. While it earned credit for demonstrating growth potential through collaboration with global drugmakers, observers say its pivot from a "smartphone raw materials" company to a "bio raw materials" company has hit a brake at the most basic level—financial credibility.
An industry official said, "Business expansion itself is positive, but without resolving issues in financial transparency and internal controls, it is hard to ensure the sustainability of new businesses," adding, "Ultimately, it depends on whether trust can be restored through the re-audit."