Investors in HLB have expressed shock after the KOSDAQ-listed firm announced that its new drug candidate rivoceranib for gastric cancer failed to improve overall survival in a phase-3 global trial.

HLB Chairman Jin Yang-gon held an urgent briefing in Yeouido, Seoul, on Thursday to explain about topline results of the trial disclosed a day earlier.

HLB Chairman Jin Yang-gon speaks at an investor relations briefing in Yeouido, Seoul, on June 14.

On Wednesday, the company announced that rivoceranib’s primary endpoint of overall survival (OS) was similar to rival drug Opdivo’s 5.26 months and Lonsurf’s 5.7 months. Rivoceranib’s PFS was no better than that of rival treatments, HLB said.

Mediocre topline results led HLB shares to plunge sharply on Thursday.

The company arranged an urgent briefing to soothe doubts and clear uncertainties. However, Jin’s remarks exacerbated shareholders’ concern.

“We confirmed the data as of 11 a.m. Wednesday and announced the topline results based on the data,” Jin said. “We did not disclose specific numbers for a technical necessity, but it rather caused more guesswork and confusion. So, we decided to provide more details quickly and transparently so that investors can make better decisions.”

What the company could confirm with the data completed in the analysis was that rivoceranib showed better OS median than the placebo group, which was similar to the results of existing rival drugs, Jin said. However, the data in statistical significance analysis showed that the drug is not expected to reach the trial’s final goal and face difficulty in winning approval from the Food and Drug Administration in the U.S., he added.

Despite the gloomy prospect, Jin emphasized that rivoceranib’s PFS median, the secondary endpoint, was significantly meaningful. Side effects remained low, as previous studies have shown, he said.

His emphasis that the company earned “meaningful data” and that “the results would not affect rivoceranib’s various indication expansion and combinations with other therapies” could not stop shares from nosediving.

On the news of rivoceranib’s setback as a candidate for a third therapy for gastric cancer, HLB stock prices dropped by the daily limit of 30 percent on Thursday, closing at 50,400 won ($43.57). Its affiliate HLB Life Science also shed 29.74 percent.

HLB shares pulled down other biotech stocks on Thursday. Sillajen fell 8.25 percent, Mezzion Pharma, 28.02 percent, and Helixmith (formerly Viromed), 5.01 percent.

Not fully trusting HLB, some investors worry that the company might find it difficult to win approval for rivoceranib as a secondary treatment for gastric cancer.

“I don’t know what intention Chairman Jin had in holding the urgent briefing,” one shareholder said. “Just a few weeks ago, he was confident about getting the firm to top the KOSDAQ market in market cap, and now I don’t know what’s happening.”

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