Profit-Taking Sell-Off... Pharmaceutical Stocks Plummet

Surge on Hopes for COVID-19 Treatment
Daewoong Pharmaceutical, Celltrion Trio, etc.
Simultaneous Decline Amid Heavy Selling Pressure

[Asia Economy Reporter Oh Ju-yeon] Pharmaceutical and bio stocks, which had surged recently due to expectations for the development of new coronavirus (COVID-19) treatments, plummeted amid year-end profit-taking sales. These related stocks experienced a rollercoaster ride, rising by double digits over the past week in response to news about COVID-19 treatments, only to give back all their gains within two days. Pharmaceutical stocks not directly related to COVID-19 treatments also fluctuated in response to ongoing clinical trial news, showing simultaneous rises and falls amid the volatile trend.

According to the Korea Exchange on the 24th, Daewoong Pharmaceutical's stock price plunged following news that its existing chronic pancreatitis treatment, 'Hoistar Tablets,' did not achieve statistical significance as a COVID-19 treatment. Daewoong Pharmaceutical had announced the topline results of a Phase 2a clinical trial on the previous day, stating, "Although the primary endpoint, the time to viral negativity, was not statistically significant, the rate at which the virus was eliminated tended to be faster in the Hoistar group compared to the placebo group."

Until then, the stock price had been on a rising rally, reacting only to positive news, but this time it plummeted in response to negative issues. It is interpreted that the strong desire to realize profits ahead of the year-end, after a steep rise in the past month, contributed to this decline.

Daewoong Pharmaceutical's stock price soared more than double from 111,000 KRW on the 1st to an intraday high of 286,500 KRW on the 22nd. However, using the lack of statistical significance of Hoistar Tablets as a pretext, the stock price fell to 159,500 KRW as of 9:50 a.m. on the same day, nearly halving from the peak and giving back much of the month's gains.

Pharmaceutical stocks that had risen alongside expectations for COVID-19 treatment development also fell together, not so much in response to any particular negative news but due to profit-taking sales triggered by this report.

The Celltrion trio was not spared from stock price declines caused by profit-taking sales. As domestic COVID-19 vaccine imports slowed and interest in treatments increased, Celltrion's stock price surged from the 230,000 KRW range at the end of October to over 400,000 KRW on the 7th, setting a new high. However, the upward momentum slowed toward the end of the month, and the stock price fell to 343,500 KRW on the 24th from 367,000 KRW at the close on the 21st. Celltrion Pharm and Celltrion Healthcare also declined by 2.66% and 3.90%, respectively, since the beginning of this week.

Other pharmaceutical stocks also gave back a significant portion of their recent sharp gains after a collective plunge the previous day. Bukwang Pharmaceutical, which had risen nearly 40% from 25,100 KRW on the 1st to 35,100 KRW on the 21st, fell for two consecutive days on the 22nd and 23rd, dropping 17% cumulatively to trade at 29,000 KRW. Myungmoon Pharmaceutical (-16%), United Pharmaceutical (-13%), and Dong Wha Pharmaceutical (-14%) also all fell by double digits the previous day.