"Only certain media are scheduled to attend our company's research and development (R&D) event. We're sorry, but please understand that attendance will be difficult."
This was the response after contacting the person in charge to attend a recent event by a bio corporations. The size of the event may be small, and attendance can be limited. But it's hard to accept inviting only select outlets and restricting coverage by other media.
What was more disappointing is that this corporations has recently been recognized for its technology in the global market and is emerging as a rising star in Korea's bio sector. Last year it signed a technology cooperation agreement with Eli Lilly and Company, and it also succeeded in joint research and attracting investment with the world's No. 1 beauty corporations L'Oréal. The technology is moving toward the world, but the door to communicate with the market was being narrowed by the company itself.
In particular, the ribonucleic acid (RNA) therapeutics this corporations is developing is still unfamiliar to retail investors. It is assessed as a next-generation technology that can target areas difficult for existing small-molecule drugs or antibody therapies to reach, but the technology itself is complex. Unless the corporations explains sufficiently, the market will struggle to properly understand its value and limits.
This is not simply a problem for one corporations. It shows what the bio industry needs to regain now. As important as technology is the market's trust, and trust ultimately begins with communication.
Bio is a representative information-asymmetry industry. New drug development takes more than 10 years, and most investors cannot directly verify the R&D process. What data a corporations has secured, how far clinical trials have progressed, and what the practical meaning of a technology-export contract is can only be known through the corporations's explanation. That's why in the bio industry, accurate and transparent disclosure is as important as research and development.
But reality is moving in the opposite direction. Technology is advancing toward the world, but the door to communication is getting narrower. Allowing only certain media to access information first while excluding the rest widens information asymmetry rather than broadening the overall market's understanding. In the end, those who suffer the most are retail investors and the public.
What's more, the bio sector now desperately needs to restore trust more than ever. People in the industry still often say "Sam Chun Dang Pharm(000250) shock." Ask why stock prices are sluggish and you'll easily hear, "It's all the Sam Chun Dang Pharm effect." Exaggerated earnings outlooks and unverified development news badly damaged investor trust, and many say the aftereffects continue to this day.
In fact, domestic pharmaceutical and bio corporations achieved technology exports worth 13 trillion won in just the first half of this year, setting an all-time record, but the market's response was not what it used to be. The large technology export by Hanmi Pharmaceutical(128940), the U.S. biotech deal by Oscotec(039200), and Alteogen(196170)'s patent dispute victory did not lift stock prices as much as in the past.
Of course, capital concentrating in semiconductors, interest-rate burdens, and the Middle East war also had an impact. But another key reason the market has turned sober is that investors have come to value data and evidence more than the corporations's announcements themselves.
Now investors look first at the size of upfront payments and the feasibility of milestones, the clinical stage, and the potential for commercialization rather than the word "technology export." As the market has matured, corporations must change as well.
Recently, major corporations such as Celltrion(068270), Alteogen, LigaChem Biosciences(141080), ABL Bio(298380), and Peptron(087010) have joined this shift by directly explaining R&D progress to defend their stock prices through shareholder letters and notices, and by engaging proactively with shareholders and investors.
As such, corporations now need to change their mindset. Strong technology alone cannot earn the market's trust. More important than rosy forecasts to attract investors are verifiable data and transparent explanations. Above all, it's necessary to break from the practice of disclosing information selectively to only a few and to strive to communicate fairly with the entire market.
A "bio boom" will never come from a single technology export. What the market wants is not "surprise news" but repeated results and unwavering trust. It is not enough for technology alone to be recognized in the global market. Only when the market and investors also gain the same level of trust will the competitiveness of Korea's bio industry be complete.