[Edaily Reporter Hong Ju-yeon ] The stock prices of all eight pharmaceutical, biotech, and healthcare companies that listed on KOSDAQ this year are trading below their initial public offering (IPO) prices. Although these companies raised high expectations by achieving consecutive successes in bookbuilding and public subscription, the IPO premium has since faded, with some companies seeing their stock prices plummet by as much as 60% since listing. Amid frozen investor sentiment, concerns are mounting that companies planning to go public in the second half of the year will also have to lower their IPO price targets and scale back their ambitions.

Success in Bookbuilding and Subscription Runs One After Another… Opening Prices Soar by 300%

in Some Cases According to the Korea Exchange on July 31, the following companies listed this year—△#Kanaph Therapeutics Inc., △#IMBiologics Corp., △#MEZOO Co., Ltd., △#RecensMedical, Inc., △#Inventera Inc., △#LEMON COMPANY LIMITED, △#Remedy, and △#HL Genomics are all trading below their initial public offering (IPO) prices. However, all of these biotech and healthcare companies successfully attracted strong interest during the institutional investor demand forecasting phase, setting their offering prices at the upper end of their target price ranges.

Kanaph Therapeutics Inc. set its offering price at 20,000 won, the upper end of its target range of 16,000–20,000 won; IMBiologics Corp. set its price at 26,000 won, the upper end of its 19,000–26,000 won range; and MEZOO Co., Ltd. set its offering price at 20,160 won, the upper end of its 16,700–21,600 won range. RecensMedical, Inc. set its price at 11,000 won, the upper end of its 9,000–11,000 won range, while Inventera Inc. set its price at 16,600 won, the upper end of its 12,100–16,600 won range. LEMON COMPANY LIMITED set its offering price at 10,000 won, the upper end of its target range (7,500–10,000 won); Remedy set its offering price at 20,700 won, the very top of its target range (17,800–20,700 won); and HL Genomics set its offering price at 21,500 won, the upper end of its target range (18,500–21,500 won).

The highest demand-forecast competition ratio was recorded by RecensMedical, Inc. at 1,352.6 to 1, followed by Inventera Inc. at 1,328.8 to 1, Lemon Healthcare at 1,238 to 1, Remedy at 1,146 to 1, and MEZOO Co., Ltd. at 1,108.9 to 1. In particular, a total of 2,246 domestic and international institutions participated in Remedy’s book-building, and expectations were so high that 99.96% of participating institutions submitted bids at or above the upper end of the price range. The enthusiasm continued during the public subscription period as well. MEZOO Co., Ltd. recorded the highest competition ratio at 2,428.3 to 1, followed by RecensMedical, Inc. at 2,097.7 to 1, Inventera Inc. at 1,913 to 1, and Kanaph Therapeutics Inc. at 1,899.3 to 1.

On their first day of trading, the opening prices for all of these companies also significantly exceeded their offering prices. IMBiologics Corp. saw its opening price rise 300% to 104,000 won from its offering price of 26,000 won. RecensMedical, Inc.’s opening price rose 241.8% to 37,600 won from its offering price of 11,000 won, while Kanaph Therapeutics Inc.’s opening price climbed 240.5% to 68,100 won from its offering price of 20,000 won. MEZOO Co., Ltd.’s opening price was 66,000 won, a 205.6% increase from its IPO price of 21,600 won, while Inventera Inc.’s opening price was 39,150 won, a 135.8% increase from its IPO price of 16,600 won.

IPO Premium Vanishes Overnight… Stock Prices Plunge by 60%

However, as time has passed since the listings, the

IPO

premium has faded. With the mandatory lock-up periods for institutional investors (1–3 months) ending sequentially, profit-taking by venture capital (VC) firms and others has hit the market, causing stock prices to weaken.

In fact, while IMBiologics Corp. had generated high expectations prior to its listing by licensing its core pipeline to U.S.-based Navigator Medicine and China’s Huadong Pharmaceutical, its closing price on the 31st was 15,310 won—a 41.1% decline from the IPO price. Kanaph Therapeutics Inc. also generated anticipation for the development of a new targeted anticancer drug, but its closing price on the same day was 10,750 won, 46.3% below the IPO price. In the case of Kanaph Therapeutics Inc., 2,078,931 shares (16%) were released from the lock-up period last June, three months after the IPO.

Inventera Inc. fell 58.5% from its IPO price of 16,600 won to 6,880 won, while MEZOO Co., Ltd. also dropped 45.4% from its IPO price of 21,600 won to 11,800 won. RecensMedical, Inc. recorded 8,970 won, down 18.5% from its IPO price of 11,000 won.

Companies that went public this month are seeing their losses widen less than a month after their listings. LEMON COMPANY LIMITED, which went public on July 6, rose to 20,300 won on its first trading day but subsequently turned downward, settling at 5,350 won—46.5% below its IPO price. Remedy, which debuted on KOSDAQ on the 13th of the same month, failed to achieve a “first-day surge” and has since fallen to 8,270 won—a 60.0% drop from its IPO price of 20,700 won—marking the steepest decline among companies listed this year. HL Genomics, which went public on the 24th of this month, is also trading at 9,380 won, down 56.4% from its IPO price.

Ingenia Sets Lower End of Offering Price Range… Will This Affect Second-Half Listings

? As the slump among newly listed stocks continues, companies planning IPOs in the second half of the year are lowering their initial public offering price expectations from the outset. Ingenia Therapeutics, set to go public next month, announced on the 28th that it had finalized its offering price at 12,000 won—the lower end of its target range (12,000–14,500 won)—and conducted its public subscription on the 30th and 31st. In the institutional investor bookbuilding, the subscription ratio stood at 50.4 to 1—the lowest this year—while the final subscription ratio for the public offering was recorded at 3 to 1. The number of shares offered was finalized at 5 million, with the total offering amount set at 60 billion won. This represents a reduction of 12.5 billion won in funds raised compared to the scenario based on the upper end of the target price range. An official from the lead underwriter, SamsungSecurities, stated, “By setting the offering price in consideration of the recent volatility in the domestic stock market and the biotech sector, we have lowered the barrier to entry for investors.”

This situation is also weighing on companies preparing for their IPOs. An official from a company aiming for a listing by the end of this year said, “With IPO requirements having been tightened and the post-listing IPO premium having shrunk significantly, the conditions for going public are far from easy.”

However, despite these adjustments, the wave of IPOs by pharmaceutical, biotech, and healthcare companies is expected to continue in the second half of the year. Companies with relatively clear revenue visibility and business models—such as medical and healthcare platforms, medical device manufacturers, and active pharmaceutical ingredient (API) producers—are preparing for listings in the second half. SkyLabs, a developer of patient monitoring medical devices, plans to begin its bookbuilding process on August 14. MS Bio, a medical device company specializing in medical human tissue grafts and biomaterials, and MBD, a precision medicine company based on patient-derived 3D tumorids, have also passed their preliminary listing reviews and have entered the full listing process.

Pharmaceutical and biotech companies currently awaiting the results of their KOSDAQ preliminary listing reviews include Baropharm, Ibex Medical Systems, Celltrix, Innovotech Therapeutics, Adel, and Nexi.