[Edaily Reporter NA EUN-KYUNG ] On the 4th, both the KOSPI and KOSDAQ rose, and the pharmaceutical and biotech sectors also performed strongly. The KOSPI Pharmaceutical Index and the KOSDAQ Pharmaceutical Sector Index rose 3.44% and 1.42%, respectively, just before the market closed. However, shares of HLB INC.(028300)—whose new drug approval review period by the U.S. Food and Drug Administration (FDA) has taken longer than market expectations—plummeted across the group, while Hugel, Inc.(145020)fell more than 12% during the trading session due to weak third-quarter earnings. In contrast, #AriBioHoldings hit the daily price limit ahead of the announcement of the results from the global Phase 3 clinical trial of its Alzheimer’s disease treatment.

HLB INC.: Class 1 Hopes Dashed… Largest Drop Among Biotech Stocks

According to KG Zeroin MP Doctor (MP DOCTOR, formerly Marketpoint) on the 4th, major listed companies within the HLB INC. Group saw their stock prices plummet in unison. HLB INC. closed regular trading at 33,500 won, down 17.69% from the previous trading day. HLBbioStep(278650)fell 22.68% to 5,080 won, marking the steepest decline among the group’s major stocks. HLB Life Science(067630)and HLB PHARMACEUTICAL(047920)also posted double-digit percentage declines.

The day’s decline is believed to be due to the FDA classifying the combination therapy of riboceranib and camrelizumab—a new liver cancer drug for which HLB INC.’s U.S. subsidiary, Elevate Therapeutics, had resubmitted an application—as “Class 2.”

Class 1 and Class 2 are criteria used to distinguish the types of reviews conducted by the FDA when a new drug application is resubmitted. Class 1 applies when the review involves relatively limited supplemental data, with a target review period of two months. In contrast, Class 2 applies when the scope of review is broader, with a target review period of six months. The target review date set by the FDA for this application is April 9 of next year.

The market was disappointed because HLB INC. had previously mentioned the possibility of a Class 1 classification. Jin Yang-gon, Chairman of HLB INC., stated at a consolidated investor relations (IR) briefing held on the 15th of last month, “Depending on the review classification results, we expect a decision on approval as early as the end of this year.” However, with the application actually classified as Class 2, expectations for an approval decision within the year have been dashed.

HLB INC. explained that its expectation of a Class 1 classification stemmed from its assessment that a significant portion of the existing manufacturing and quality control issues had been resolved. An HLB INC. official said, “Since the on-site inspections of the manufacturing facilities for both the active pharmaceutical ingredient (API) and finished dosage form of Riboceranib were concluded through Voluntary Corrective Actions (VAI), we believed the obstacles to approval had been resolved,” adding, “We thought there might be a chance for a Class 1 classification, but the market seemed to interpret this as somewhat certain, leading to heightened expectations.”

A Class 2 classification does not necessarily mean that the likelihood of the new drug’s approval has decreased. It simply means that the FDA has allocated a longer period to review the supplemental data, and it does not necessarily imply that a re-inspection of the manufacturing facilities will take place.

HLB INC. officials explained, “The FDA did not specifically mention the reasons for classifying it as Class 2,” adding, “Whether a re-inspection will take place is up to the FDA, so we cannot make any definitive conclusions at this time.”

The fact that HLBbioStep, among the group’s affiliates, saw a particularly sharp decline is believed to be due to a flood of profit-taking selling following its recent short-term surge. HLBbioStep hit the daily price limit for three consecutive trading days from the 6th to the 8th of last month and rose 29.87% on the 2nd of this month.

Within the HLB Group, the companies directly linked to the U.S. approval of Riboceranib from a business perspective include HLB INC., which is responsible for global development and commercialization, as well as HLB Life Science and HLB PHARMACEUTICAL, which hold domestic rights.

Hugel, Inc. Reports 62% Drop in Q3 Operating Profit… Impacted by U.S. Inventory Buyback

Immediately after announcing its third-quarter earnings today, Hugel, Inc.’s stock price plummeted 12.36% from 191,000 won to 167,400 won. However, the stock rebounded after the company announced a share buyback and cancellation program worth approximately 53.7 billion won, closing at 184,000 won—down 2.90% from the previous day’s regular session closing price.

Hugel, Inc.’s consolidated revenue for the third quarter of this year was 97.5 billion won, a 7.9% decrease compared to the same period last year. Operating profit fell 61.8% to 18.1 billion won, and net profit amounted to only 4.7 billion won. In particular, operating profit dropped 67.7% from the previous quarter, falling short of market expectations.

The primary cause of the poor performance is the restructuring of the U.S. distribution system. Since launching sales of its botulinum toxin “Retivo” in the U.S. last year, Hugel, Inc. has been transitioning its existing distribution partner, Benev, into a contract sales organization (CSO). This is an intermediate step toward a full direct sales model in the second half of next year.

During this process, Hugel, Inc. repurchased a portion of the Retivo inventory it had previously supplied to Beneve and recognized as revenue. The one-time costs associated with this were fully reflected in the third-quarter results.

A Hugel, Inc. official explained, “There was a process of repurchasing quantities that had been normally supplied to our existing distribution partner,” adding, “While we could have spread the cost over several quarters, we chose to reflect the entire amount as a one-time expense in the third quarter.”

The company maintains that U.S. sales themselves are not sluggish. A Hugel, Inc. official stated, “The cumulative volume supplied to the local market and sales are on a steady upward trend,” adding, “Since the burden from the inventory repurchase was fully reflected in the third quarter, U.S. sales are expected to return to normal in the fourth quarter.”

Retivo received FDA approval in February 2024 and was launched in the U.S. market in 2025. With established products such as AbbVie’s Botox, Galderma’s Dysport, and Evolus’s Juvo already firmly entrenched in the U.S. botulinum toxin market, Retivo, as a latecomer, needs a differentiation strategy.

Hugel, Inc. is leveraging its position as the leader in the domestic botulinum toxin market through its “K-Tox” marketing campaign, while also highlighting clinical evidence showing that the drug’s effects spread to a limited area around the injection site.

A Hugel, Inc. official explained, “Retivo has clinical evidence showing that it can reduce the spread of effects to unintended areas,” adding, “Based on this, we are expanding our academic and medical marketing efforts targeting healthcare professionals in the U.S.”

Growth continued in major markets outside the U.S. Combined domestic sales of toxins, fillers, and skin boosters reached 27.4 billion won, a 54% increase from the same period last year. Sales in Europe and other regions rose 18% to 17.8 billion won. Sales also expanded in China and Brazil, with Brazil posting its highest-ever quarterly sales.

Hugel, Inc. announced today that it will cancel 300,000 shares of its own stock on the 11th. The estimated value of the cancellation is approximately 53.7 billion won, representing about 2.4% of the total issued shares. The company stated that the purpose of the cancellation is to enhance shareholder value and stabilize the stock price.

AriBio Holdings Hits Daily Price Limit as Phase 3 Results for AR1001 Approach

AriBio Holdings closed at 3,620 won today, up 29.98% from the previous trading day. After rising steadily since the morning, the stock hit the daily price limit just before the market closed. This is interpreted as reflecting investor anticipation ahead of the imminent announcement of the results from the global Phase 3 clinical trial of “AR1001,” a candidate drug for Alzheimer’s disease.

AriBio plans to present the topline results of the global Phase 3 clinical trial “POLARIS-AD” for AR1001 at “CTAD 2026,” a conference on Alzheimer’s disease clinical trials, to be held in Boston, U.S., on the 16th (local time).

This clinical trial was conducted in 13 countries, including the U.S., South Korea, and Europe, involving 1,535 patients with early-stage Alzheimer’s disease. Patients were administered either 30 mg of AR1001 or a placebo for 52 weeks to evaluate the drug’s effects on cognitive function and activities of daily living.

The market is paying close attention to the fact that these results could influence not only future efforts to secure U.S. approval but also follow-on revenue from large-scale technology transfer agreements.

Last May, Aribio signed an option and licensing agreement worth up to $4.7 billion (approximately 7 trillion won) with Fosun Pharma, a major Chinese pharmaceutical company, for the global development and commercialization of AR1001. Subsequently, by July, the company had received the full $60 million (approximately 90 billion won) in option upfront payments.

Under the terms of the agreement, the company is eligible to receive an additional $80 million (approximately 120 billion won) upon the announcement of Phase 3 clinical trial topline results. If Fosun Pharma exercises its option for global rights, AriBio can also expect milestone payments and royalty revenue based on subsequent development, approval, and sales milestones.

An official from AriBio Holdings stated, “Based on these topline data, we may receive an additional option payment from Fuxing Pharmaceutical, which serves as a second installment,” adding, “We are also in a position to receive subsequent milestone payments.”

AR1001 is an oral, once-daily candidate drug for Alzheimer’s disease. It is being developed to act on multiple pathways—including cerebral blood flow, neuroprotection, and amyloid-beta-related pathology—by utilizing a phosphodiesterase 5 (PDE5) inhibition mechanism. Unlike the currently approved Leqembi and Kisunla—which are antibody-based injectable therapies that target amyloid-beta—AR1001 positions its oral administration and ability to target multiple pathological mechanisms as key differentiators.