[Edaily Reporter SONG YOUNG-DOO ] On the 3rd, pharmaceutical and biotech stocks plummeted across the board, creating a day reminiscent of “Black Friday.” Stocks that had been riding a wave of positive news—including LigaChem Biosciences, which secured 500 billion won in strategic investment from the government; D&D Pharmatech Inc., where expectations for technology exports are growing; AprilBio Co.,Ltd., acquired by TKG Group; and L&C BIO, which has momentum for expansion into the U.S.—all fell in tandem. In addition, Solux Co., Ltd. saw its stock price plummet by double digits after the Financial Supervisory Service once again requested revisions to its securities registration statement for its merger with AriBio. Analysts attribute this to a combination of company-specific negative factors, profit-taking, and a decline in investor sentiment.

Exchange Issues Another Request for Corrections... Another Setback for the AriBio Merger That Has Dragged On for Two Years

According to KG Zeroin MP Doctor Solux Co., Ltd.(290690), Solux Co., Ltd.’s stock price closed at 4,370 won, down 11% (540 won) from the previous trading day. This is believed to be due to the Financial Supervisory Service’s (FSS) request the previous day for Solux Co., Ltd. to submit a revised securities registration statement regarding its merger with AriBio.

The FSS cited the following reasons for requesting corrections: △deficiencies in the format of the securities registration statement; △false statements or omissions regarding important matters; and △content that could hinder investors’ reasonable investment decisions. Consequently, the current securities registration statement is considered not to have been accepted, and the merger process has effectively been put on hold until a corrected registration statement is submitted.

The market reacted sensitively because this filing was widely viewed as marking the final stage of the merger. In the securities registration statement submitted on the 23rd of last month, Solux Co., Ltd. and AriBio had proposed August 25 as the date for the shareholders’ meeting to approve the merger, September 29 as the merger effective date, and October 21 as the scheduled listing date for the new shares. They also finalized the procedures, including revising the enterprise values of the surviving entity, Solux Co., Ltd., and the dissolving entity, AriBio, to 533.1 billion won and 551.0 billion won, respectively.

However, just nine days after submission, they received another request for corrections, fueling growing concerns in the market that “the schedule might be delayed again.” In fact, the merger between AriBio and Solux Co., Ltd. has been subject to repeated requests for corrections and schedule changes since it was first announced in 2024.

Industry analysts suggest that financial regulators are continuing to scrutinize the basis for AriBio’s enterprise value assessment. AR1001, AriBio’s core pipeline—an oral Alzheimer’s treatment—is a new drug candidate currently undergoing global Phase 3 clinical trials. Since it is still in the pre-approval stage, analysts note that stricter verification is being conducted regarding future revenue estimates, technological value, and the feasibility of agreements such as the technology transfer deal with China and the sales contract with the UAE.

This request for corrections has also made adjustments to the overall merger schedule inevitable. Under the Capital Markets Act, the company must resubmit its securities registration statement within three months of the request date; failure to do so will result in the statement being deemed withdrawn. Consequently, the extraordinary general meeting of shareholders scheduled for this month and the merger approval scheduled for August are now likely to be postponed.

AprilBio Co.,Ltd. Falls for Fourth Consecutive Trading Day Following TKG Acquisition Announcement

AprilBio Co.,Ltd.(397030)closed at 32,700 won today, down 6.70% (2,350 won) from the previous trading day. The stock price, which stood at 40,550 won on the 30th of last month, fell for four consecutive trading days—to 38,650 won (-4.7%) on July 1, 35,050 won (-9.3%) on the 2nd, and 32,700 won (-6.70%) on the 3rd—resulting in a cumulative decline of 20.7%.

The most striking aspect is that the current stock price is significantly below the price set for this management control transaction. The conversion price for the convertible preferred shares (CPS) with voting rights being acquired by TKG Huchems is 42,953 won, while the issue price for the common shares being acquired by IMM is 40,908 won. The current stock price is approximately 27% and 23% lower than these prices, respectively. In effect, while the new major shareholders are investing at prices in the 40,000-won range, existing investors are selling their shares even in the low 30,000-won range. This suggests that the market is factoring in a discount rather than a premium for this transaction.

Through this transaction, AprilBio Co.,Ltd. will secure a total of 346.8 billion won in new funds. Upon completion of the deal, its cash holdings are expected to increase to around 400 billion won. Immediately following the acquisition announcement, Korea Investment & Securities maintained its target price of 112,000 won and “Buy” rating, noting, “The market capitalization of this biotech company, which has secured 400 billion won in cash, is merely 900 billion won.”

However, the market is placing greater importance on when this capital will translate into an increase in the company’s value, rather than the large-scale capital inflow itself. Although AprilBio Co.,Ltd. has successfully licensed its technology to companies such as Lundbeck and Evomune based on its SAFA platform, no additional major technology exports have materialized since then. Since the secured funds are also scheduled to be invested in the development of follow-up pipeline candidates and the expansion of global clinical trials, investors are awaiting the next technology export and clinical results.

Some observers believe that the potential for dilution due to the convertible preferred stock (CPS) structure, as well as short-term profit-taking, also contributed to the stock’s weakness.

L&C BIO Shows Weakness Despite Positive News on Rituo’s U.S. Entry

L&C BIO(290650)closed at 83,100 won, down 5.25% (4,600 won) from the previous day. Although no specific negative news emerged during the trading session, the stock was among the top decliners in the biotech sector before narrowing its losses toward the market close.

The company stated that there are no internal issues that would explain the stock price decline. An L&C BIO official said, “There are absolutely no internal issues, and business is proceeding as planned,” adding, “We have checked with market participants as well, but no specific negative news or rumors have been identified.” The official continued, “Given that the stock price has risen significantly recently, it appears that some profit-taking has occurred, but today’s decline seems somewhat excessive.”

Recent news surrounding the company has actually been positive. Sales of its flagship product, the ECM (extracellular matrix) skin booster “Rituo,” continue to grow rapidly. Hana Securities projected that Rituo sales for the second quarter of this year would reach approximately 14 billion won, nearly doubling from the first quarter (8 billion won). The firm expects consolidated revenue for this year to reach 163.7 billion won—a 92% increase year-over-year—with operating profit improving significantly to 39.8 billion won.

Medium- to long-term growth momentum is also continuing. The company is moving forward with establishing a U.S. subsidiary and building local production facilities to enter the U.S. human tissue graft market. Recently, following the acquisition of a key patent related to human tissue grafts in the U.S., amendments to the Waste Management Act have also laid the institutional groundwork for utilizing waste fat generated during the skin processing stage as a medical product. The company views this as a next-generation growth driver.

Ultimately, the analysis suggests that short-term supply-and-demand factors played a larger role in the day’s sharp stock price decline than a deterioration in fundamentals. Growth momentum—including expanded sales of “Rituo,” entry into the U.S. market, and new businesses based on waste fat—is proceeding as planned, so future earnings and the performance of overseas operations are expected to be key variables affecting the stock price.

The sharp decline in the biotech sector on this day is interpreted as being largely driven by a contraction in sector-wide investor sentiment rather than issues specific to individual companies. Given that even stocks with major positive factors—such as expectations for securing policy funding and technology exports, investments from large corporations, and overseas expansion—fell in tandem, the outlook suggests that, for the time being, actual earnings, technology exports, and the performance of global operations will continue to drive stock prices rather than specific events.