[Seungkwon Kim, Edaily Reporter] Korean pharmaceutical, biotech, and healthcare stocks showed sharply mixed movements on September 29 as company-specific news drove trading. AriBio Holdings plunged to its daily lower limit in after-hours trading after announcing it had called off its planned merger with AriBio, which it had pursued for more than two years. LaMediTech, by contrast, hit its upper limit on expectations for the launch of its ECM skin booster.

HLB Pharmaceutical rose more than 20% for a second day after HLB received FDA approval for its bile duct cancer drug Lyrfigtu, and medical AI firm VUNO also gained over 20% for a second session on the back of its expansion into China.

AriBio Holdings Hits Lower Limit After Scrapping Merger With AriBio

AriBio Holdings, formerly Soluxe, closed regular trading down 1.75% at 3,920 won. After the market closed, however, the company announced the termination of the merger, and the stock fell to its lower limit on the Nextrade (NXT) after-hours market as sell orders flooded in.

Both companies held board meetings on Tuesday and signed agreements to terminate the merger contract. All remaining merger steps—including the extraordinary shareholders’ meeting scheduled for January, the appraisal rights process, and the merger date—were canceled. Since signing the merger contract in August 2024, the companies had repeatedly pushed back the schedule. Just a week earlier, on September 22, they filed an amendment moving the merger date from December 4 of this year to February 11 of next year.

The direct reason for the withdrawal was the burden of appraisal rights. According to the withdrawal filing, AriBio Holdings’ reference share price was far below the appraisal price calculated under relevant laws. Under the latest amended merger agreement, the appraisal price for AriBio Holdings shareholders was set at 10,719 won per share—about 2.7 times the current share price. This meant shareholders stood to gain more by opposing the merger and demanding that the company buy back their shares than by selling on the market. Repeated demands from the Financial Supervisory Service to revise the securities registration statement for the new merger shares also weighed on the deal.

A change in AriBio’s valuation was another factor. In May, AriBio signed an exclusive global development and commercialization deal worth up to $4.7 billion with China’s Fosun Pharma for AR1001, its oral Alzheimer’s drug candidate. AriBio stated that this additional exclusive licensing deal had altered the reference share valuation. The company anticipated a large volume of appraisal claims if the shareholders’ meeting proceeded and halted the merger to avoid that risk.

AriBio Holdings’ share price had long been driven by expectations of the merger. The company conducted a large bonus issue in December 2023, issuing 14 new shares for each existing share. However, investor concerns grew as the merger was delayed by repeated demands for regulatory revisions. Last December, the company received advance notice that it would be designated as a firm with non-compliant disclosures due to retracted disclosures, and in June, it changed its name from Soluxe to AriBio Holdings. With the new merger shares amounting to approximately 103% of AriBio Holdings’ existing outstanding shares, concerns about dilution among existing shareholders were also significant.

The failed merger does not signal the end of drug development. The global Phase 3 trial of AR1001 and the deal with Fosun Pharma will proceed separately. Market attention is now expected to shift to how AriBio will pursue an IPO and financing, such as a standalone listing rather than a backdoor listing. At the time of the Fosun deal, AriBio stated that it was also considering a standalone KOSPI listing separate from the merger.

LaMediTech Hits Daily Limit Ahead of ‘IO-FILL’ Launch

According to KG Zeroin, LaMediTech closed up 29.98% at 4,035 won, its daily limit. The stock has risen more than 50% in about two weeks from the 2,500-won range in mid-September.

The company listed on KOSDAQ in June 2024 at an IPO price of 16,000 won and reached 56,000 won intraday on its debut, but the stock price fell as earnings fell short of its pre-listing guidance. Its 52-week trading range is 2,290–9,300 won. In March, approval of its laser lancing and glucose monitoring device, HandyRay-Glu, sent the stock to its daily limit (5,920 won), but the gains did not hold.

The latest rally appears to reflect expectations for its new ECM skin booster business. LaMediTech plans to begin supplying the skin booster brand IO-FILL to Korean clinics next month. It signed a domestic distribution agreement with allogeneic ECM manufacturer Eretec Korea last December and obtained a human tissue bank license from the Ministry of Food and Drug Safety in May.

The company states that IO-FILL uses a patented natural surfactant in the decellularization process instead of the synthetic surfactants commonly found in rival products, thereby reducing the risk of inflammation and fibrosis caused by chemical residues.

LaMediTech is pursuing a “turnkey” strategy that combines devices and materials. Its clinic-use laser, the FX-7000M—submitted for approval in July—creates microchannels in the skin to improve the dermal delivery of ECM and other active ingredients.

“We will pursue a domestic launch in the second half of the year as soon as approval is granted,” a company official said, adding that the company would expand its portfolio to include laser devices and ECM-based aesthetic solutions.

According to brokerage estimates, South Korea’s ECM skin booster market is expected to grow from 9.9 billion won last year to 92.5 billion won this year and 172.9 billion won next year. However, with L&C Bio’s Re2O and Hans Biomed’s CellREDM, followed by GC Wellbeing, Vaim Global, and HLB Life Science, some warn of “toxin-style” price competition. For latecomer LaMediTech, the key is whether device integration translates into prescriptions.

HLB Pharmaceutical Extends Gains Following Lyrfigtu Approval

HLB Pharmaceutical rose 25.05% to 12,030 won, building on the previous session’s limit-up close of 9,620 won for a two-day gain of about 63%. Trading volume exceeded 7 million shares, more than 200 times the previous session’s volume of 32,890 shares.

The catalyst was HLB’s new drug approval. HLB’s U.S. subsidiary, Elevar Therapeutics, received FDA approval on September 23 (local time) for Lyrfigtu (lirafugratinib) as a second-line treatment for bile duct cancer with FGFR2 fusions or rearrangements—marking the first time a Korean company has directly filed and secured approval for a global cancer drug NDA. On Sept. 28, the first trading day following the Chuseok holiday, 10 HLB Group affiliates closed at their daily price limits.

In the pivotal ReFocus Phase 1/2 trial, Lyrfigtu demonstrated an objective response rate of 45.7% and a median duration of response of 11.8 months. Elevar is targeting a U.S. launch in the fourth quarter and submitted an application to the European Medicines Agency this month. Attention is now turning to the resubmission of the liver cancer drug. HLB Group Chairman Jin Yang-gon stated that Hengrui’s CMC deficiencies “have already been resolved” and that HLB will resubmit the application once updated safety data has been compiled.

HLB Pharmaceutical’s 52-week high was 24,250 won, but the stock fell as low as 6,000 won after the liver cancer drug received a third complete response letter in July. It began rebounding this month on expectations for its long-acting injectable dementia treatment and is up about 94% from its Sept. 18 close of 6,210 won.

Core earnings are improving. First-half consolidated revenue rose 56.8% to a record 127.9 billion won, driven by double-digit growth in prescription drugs such as Rosuduo and Tinza, which lifted the company’s outpatient prescription ranking from 48th to 42nd. Operating profit, however, was only about 1 billion won.

Its long-term growth driver is the in-house long-acting injectable platform SMEB, but many candidates remain in the preclinical stage. With a P/E ratio above 100, the valuation warrants scrutiny beyond the group’s momentum.

A company official said that earnings from subsidiaries and growth in the core business “came together,” adding that the company would continue to improve profitability through in-house production at its new Hyangnam plant.

VUNO Rallies for Second Day on China Deal

VUNO rose 21.99% to 8,320 won, following a 22.44% gain in the previous session.

The rally was driven by its entry into the Chinese market. On September 28, VUNO announced it had signed a two-year exclusive agreement with Chinese medical firm Guorun to sell its AI-powered cardiac arrest prediction device, VUNO Med-DeepCARS, in Hainan. The two companies will conduct proof-of-concept trials at hospitals in the Boao Lecheng medical tourism pilot zone, where drugs and devices approved overseas can be used prior to mainland approval. In Jiangsu, VUNO is pursuing a deal with BioVision for its Fundus AI.

The past year has been challenging. VUNO’s 52-week high was 30,350 won, but the stock fell as low as 4,235 won as DeepCARS’ FDA clearance was delayed by a request for multi-ethnic data, followed by a rights offering and restructuring. It remains more than 70% below its peak.

Revenue rose 35% to 34.8 billion won last year, but first-half revenue fell 27.6% to 12.2 billion won, and the operating loss widened to 8.3 billion won as the new health technology assessment for DeepCARS limited new hospital adoption. With DeepCARS accounting for 86% of revenue, the assessment result expected in the fourth quarter will be a key inflection point.

Kiwoom Securities analyst Heo Hye-min said, “The bottom of the sector’s price correction is being confirmed,” but noted that ending the correction will require fundamental improvements, such as earnings beating expectations, high-quality licensing deals, and clinical data demonstrating global competitiveness.