Biotech companies that went public in the first half of this year have shown disappointing stock performance, despite their flashy start.
Shares of new pharmaceutical and biotech companies fared worse than those in other sectors on the KOSDAQ market, but their performance gaps have somewhat narrowed since the third quarter.
Biotech and medical device companies that went public in the first half include Korea Arlico Pharm, Dongkoo Bio & Pharma, Eone Diagnomics (EDGC), Enzychem Lifesciences, Osteonic, CareLabs, Genoray, and Sejong Medical.
The eight biotech firms’ stock prices declined by 17 percent on average as of Tuesday, from the closing prices on their initial public offering (IPO) day. Compared to the public offering prices, their shares went up 56 percent on average.
In contrast, the share prices of 13 non-biotech companies that were newly listed in the first half rose 34 percent on average from the closing prices on the IPO day. Compared to the public offering prices, their shares jumped 62 percent on average.
Gaps in stock price gains between biotech and non-biotech companies have diminished in the third quarter compared to the first half (as of noon on July 3, non-biotech shares up 77 percentage points). However, the gaps between shares of biotech and non-biotech companies, compared to the IPO day, remain wide.
The relative underperformances of biotech firms are attributable in part to the significant rise of their shares on the IPO day.
On the IPO day, Dongkoo Bio & Pharma shot up 160 percent, CareLabs, 160 percent, Sejong Medical, 100 percent, Korea Arlico Pharm, 95.8 percent, EDGC, 70.8 percent, Osteonic, 70.1 percent, Genoray, 62.4 percent, and Enzychem Lifesciences, 52.1 percent.
The shares of the eight companies rose 88 percent on average on the first day of the listing, compared to their public offering prices. Their debut on KOSDAQ was relatively successful, as non-biotech firms saw their stock prices gain only 6.3 percent on the IPO day.
Hana Pharm, which went public on the benchmark KOSPI on Tuesday, had priced its initial public offering at 26,000 won ($23) per share. On the IPO day, the stock started at 30,100 won and closed at 30,315 won.
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