[Edaily Reporter KIM SAE-MI ] Lee Sang-hoon, CEO of ABL Bio ABL Bio Inc.(298380) —who wrote the “8 trillion won technology export legend”—is now facing the most serious allegations since the company’s founding. This comes as financial authorities have launched a compulsory investigation into allegations that executives and employees used undisclosed information for stock trading, and it has been reported that the CEO’s family has also been included in the scope of the investigation.

The Joint Task Force to Eradicate Stock Price Manipulation—comprising the Financial Services Commission, the Financial Supervisory Service, and the Korea Exchange—conducted raids on eight locations, including ABL Bio Inc.’s headquarters in Gangnam-gu, Seoul, on the 15th. Authorities are investigating whether company officials and others traded the company’s stock before the public disclosure of a large-scale technology transfer agreement with a global pharmaceutical company and reaped illicit gains as the stock price rose following the announcement of the agreement. So far, approximately 10 individuals are known to be under suspicion, and the scale of the illicit gains is reported to exceed 1 billion won.

It has not been confirmed whether CEO Lee Sang-hoon is directly implicated in this case. However, the fallout has grown as it has been reported that the CEO’s family members and the spouses of registered executives are among those under investigation. The market also reacted sensitively. On the 15th, when the raids took place, the stock price plummeted 8.01% in a single day, and on the 16th, it fell an additional 4.22%.

In the financial authorities’ investigation, key issues are expected to include who actually managed the accounts held in family members’ names, whether the parties to the transactions had prior knowledge of the technology transfer information, and, if so, through what channels they received it. To date, no evidence has been disclosed to conclusively determine that CEO Lee passed on undisclosed information to his family or was directly involved in the stock transactions.

Coincidentally, the contracts reportedly under investigation are the “big deals” that put CEO Lee Sang-hoon and ABL Bio Inc. on the global map.

Last April, ABL Bio Inc. signed a technology transfer agreement with GSK Holdings for the development of treatments for degenerative brain diseases using the “Grabody-B” blood-brain barrier (BBB) shuttle platform. Including the upfront payment and short-term milestones totaling up to 148 billion won, the total contract value exceeded 4 trillion won. On the day the deal was announced, the company’s stock price rose to the daily price limit.

In November of the same year, ABL Bio Inc. secured another major deal with Eli Lilly. This agreement, aimed at developing treatments based on various modalities using the Grabody platform, had a total value of $2.602 billion—including an upfront payment of $40 million (approximately 58.4 billion won)—which amounted to roughly 3.8 trillion won at the exchange rate at the time. In addition, Lilly decided to invest approximately 22 billion won in ABL Bio Inc.

The combined value of these two deals alone approaches 8 trillion won. Through these achievements, CEO Lee established himself as one of the leading “deal makers” in the domestic biotech industry. By leveraging bispecific antibodies and BBB shuttle technology to secure consecutive partnerships with global pharmaceutical companies, he demonstrated ABL Bio Inc.’s capability in technology licensing.

However, the technology export agreements that fueled the company’s growth have now become the source of internal control risks. Large-scale technology transfers are prime examples of material non-public information that requires strict confidentiality until the contract is signed. In particular, since stock prices of biotech companies fluctuate significantly based on technology transfers or clinical results, it is necessary to strictly manage not only the stock trading of employees and executives with access to such information but also that of related parties, such as family members.

ABL Bio Inc. also took steps to contain the situation by issuing a series of messages to shareholders as the controversy escalated. On the 16th, the company stated that it would cooperate sincerely and transparently with investigations by relevant authorities and announced its intention to review and improve its compliance management, internal controls, and information management systems.

Then, on the 17th, the company once again apologized to shareholders through an investor relations (IR) message. ABL Bio Inc. stated, “We apologize for causing concern to our shareholders due to the recent situation involving the company,” adding, “We are cooperating fully with the ongoing investigation by the relevant authorities and are diligently following the necessary procedures to ensure the facts are clearly established.”

A biotech industry official remarked, “If the investigation reveals that the CEO was directly involved in the disclosure of information, this will not end as a mere failure of internal controls by executives and employees but could escalate into legal and managerial risks for the CEO,” adding, “This is an issue the industry is also closely monitoring.”

◇ Profile of Lee Sang-hoon, CEO of ABL Bio Inc.
△Born January 22, 1963
△ B.A. in Biological Education, Seoul National University
△ Master’s degree in Animal Development, Seoul National University Graduate School
△ Ph.D. in Molecular, Cellular, and Developmental Biology, Ohio State University, USA
△Postdoctoral Researcher, Harvard Medical School and University of California, San Francisco (UCSF)
△2000–2004: Principal Scientist at Chiron (now Novartis), USA
△ 2004–2005: Principal Scientist at AstraZeneca
△ 2005–2008: Group Leader and Scientist at Genentech
△ 2008–2009: Senior Scientist II and Associate Director at Exelixis
△2009–2013: Co-founder and Chief Scientific Officer (CSO) at Pharmepxin
△2013–2016: Head of the Bio Business Division, Executive Vice President, Hanwha Chemical
△2016–Present: Founder and CEO, ABL Bio Inc.
△2022–Present: Registered Officer, ABL Bio Inc. USA