[Edaily Reporter KIM SAE-MI ] On the 22nd, on the Korea Composite Stock Price Index (KOSPI), SamsungElectronics(005930)—which had held the top spot in market capitalization for 24 years—ceded its throne to SK hynix(000660). On that day, SK hynix’s market capitalization stood at 2,080.3782 trillion won, while SamsungElectronics’ was 2,066.6595 trillion won. In response, one investor remarked, “Shouldn’t we now call it ‘Nick-Jeon’ instead of ‘Jeon-Nick’ (a portmanteau of SamsungElectronics and SK hynix)?”

In the biotech and healthcare sectors, there is growing concern that the prolonged trend of investment capital being excessively concentrated in large-cap semiconductor stocks is becoming a long-term issue. An industry official stated, “As market funds are pouring into certain semiconductor stocks like SK hynix, the broader KOSDAQ biotech sector is being sidelined,” adding, “Even when biotech stocks announce technology transfers or clinical trial momentum, the market reaction is not as strong as it used to be.”

Another industry insider observed, “Domestic biotech investors are now scrutinizing contract structures and follow-up momentum much more critically than in the past,” and predicted, “For the biotech sector to rebound, there will need to be a series of consistent achievements, rather than just one or two technology export deals by individual companies.”

As domestic biotech stocks have continued their prolonged slump, a significant number of biotech companies have launched defensive communication efforts—such as issuing announcements, Seohan, and investor relations (IR) materials—to reassure the market that their management is sound and that research and development (R&D) is proceeding smoothly. This includes leading companies in the sector such as Alteogen Inc.(196170), LigaChem Biosciences(141080), and ABL Bio Inc.(298380), demonstrating that the decline in biotech investment sentiment is not limited to small and mid-cap stocks.

ChoA Pharmaceutical Co., LTD. Rises on Expectations of ‘Escaping Penny Stock Status’… 5-to-1 Stock Consolidation

According to KG Zeroin MP DOCTOR (formerly Marketpoint) on that day, ChoA Pharmaceutical Co., LTD.(034940)closed at 659 won, up 152 won (29.98%) from the previous day. It is believed that expectations of escaping penny stock status drove the stock price higher.

ChoA Pharmaceutical Co., LTD. posted a notice convening a shareholders’ meeting on the 19th, the previous trading day. The main agenda item for the extraordinary general meeting, scheduled for the 6th of next month, is the approval of a stock consolidation. If approved, a 5-to-1 par value consolidation will be implemented, combining five common shares into one and raising the par value from 500 won to 2,500 won.

Since a stock consolidation reduces the number of shares while raising the price per share, it does not fundamentally change the market capitalization or the value of shareholdings. However, with the Financial Services Commission (FSC) set to implement delisting requirements for penny stocks starting on the 1st of next month, companies with penny stocks have found it necessary to proactively pursue stock consolidations.

The FSC plans to designate penny stocks—those whose share price remains below 1,000 won for 30 consecutive trading days—as “monitored stocks,” and if they fail to recover to 1,000 won or higher for 45 consecutive trading days within the subsequent 90 trading days, the company will face delisting proceedings.

In fact, quite a few biotech and healthcare companies have already initiated stock splits in anticipation of these requirements. In addition to ChoA Pharmaceutical Co., LTD., the following companies have decided to conduct stock splits this year: △HUMASIS CO., LTD.(205470) △HLBbioStep(278650) △NeoImmuneTech, Inc.(950220) △C&R Research(359090) △From Bio Co., Ltd.(377220) △PeopleBio, Inc.(304840) △Noul Co., Ltd.(376930).

A financial investment industry official noted, “While stricter delisting requirements and rules for removing penny stocks can serve as mechanisms to weed out underperforming companies, they may also place a burden on biotech firms that are still in their growth phase,” adding, “The issue is what criteria to use when evaluating companies that are not yet generating immediate profits.”

CG MedTech’s Stock Plummets… Has the Market Digested News of Largest Shareholder Sijibio’s Sale?

Innosys(056090)gave back some of the gains it had made the previous trading day (the 19th), when it hit the daily price limit on positive news related to its

largest shareholder

. On this day, CG MedTech’s stock price closed at 1,290 won, a sharp drop of 328 won (20.27%) from the previous day.

CG MedTech, which has focused on producing orthopedic medical devices, is understood to have SJ Bio—a medical device company specializing in regenerative medicine and bio-based materials—as its largest shareholder. Sijibio is also an affiliate of the Daewoong Group, which has been controlled by Yoon Jae-seung, Chief Vision Officer (CVO) of DAEWOONGPHARMACEUTICAL. CG MedTech’s stock price had previously surged following recent news that Sijibio was to be acquired by IMM Private Equity (IMM PE), a domestic private equity firm.

According to the pharmaceutical and biotech industry, IMM PE is scheduled to sign a share purchase agreement (SPA) this week with CVO Yoon’s group to acquire a 51% stake in C-G Bio for 5610억원. It is also reported that a conditional sales agreement will be signed simultaneously, stipulating that if C-G Bio’s annual earnings before interest, taxes, depreciation, and amortization (EBITDA) reaches 100 billion won—double its current level—the remaining 28.1% stake will also be transferred for an additional 561 billion won. If these conditions are met, IMM PE’s stake will increase to 79.1%, and the total transaction value could reach up to 1.122 trillion won.

If IMM PE secures management control of Siji Bio, the de facto controlling entity of CG MedTech will also shift from the Daewoong owner family to IMM PE. However, this is not structured as a direct acquisition of CG MedTech shares by IMM PE. Instead, CG MedTech will be incorporated as a subsidiary under Siji Bio.

Hair Loss Stocks

Riding on Policy Expectations… JW SHINYAK CORPORATION and SAMIK PHARM. Co., LTD. ‘Strong’

Amid expectations of expanded National Health Insurance coverage for hair loss treatments, “hair loss stocks” continued their upward trend.

JW SHINYAK CORPORATION(067290)closed at 2,730 won, up 395 won (16.92%) from the previous day, while SAMIK PHARM. Co., LTD. closed at 8,960 won, up 550 won (6.54%) from the previous day.

JW SHINYAK CORPORATION has a lineup of hair loss treatments, including the finasteride-based “Monad Tablets” and “Monasta Tablets,” as well as the dutasteride-based “Dutamoa Tablets.”

In addition, market expectations regarding “JW0061”—a hair loss treatment candidate currently under development by JWPHARMACEUTICAL within the JW Group—are believed to have contributed to the rise. JW0061 is a topical hair loss treatment candidate that targets the GFRA1 receptor; it is drawing attention for its mechanism of action, which differs from existing hair loss treatments centered on androgen inhibitors.

SAMIK PHARM. Co., LTD. was grouped under the hair loss theme due to issues related to its long-acting injectable platform technology. Earlier this year, SAMIK PHARM. Co., LTD. registered a patent for polymer microparticle manufacturing technology that enables the development of baricitinib—a JAK inhibitor used to treat alopecia areata—as a long-acting injectable.

A pharmaceutical industry official emphasized, “The rise in some hair loss-related stocks appears to be driven by theme-based supply and demand,” adding, “It is necessary to examine whether the momentum surrounding hair loss is directly linked to the intrinsic value of individual companies.”