[Click eStock] Bionex "Momentum Weakens if Administrative Sanctions Occur"... Olipass "Clinical Trials Should Be Watched"

[Asia Economy Reporter Lee Seon-ae] SangSangIn Securities released a comment report on the issues concerning Bionex and Olipass on the 10th.

According to SangSangIn Securities, Bionex announced that on the 8th, the Ministry of Food and Drug Safety imposed a temporary suspension of manufacturing and sales and recall measures on six of its products: Amorin tablets (diabetes medication), Selectin capsules/10mg (antidepressant), Daxpen tablets (arthritis medication), Lofsin tablets (antibiotic), and Cadil tablets 1mg (hypertension medication). On the 9th, similar measures were applied to 32 consigned products, including Dekpen tablets (arthritis medication). It was also reported that an investigation into Bionex’s Busan factory would be conducted simultaneously. The sales revenue for these 38 products (6 self-sold, 32 consigned) was approximately 2.5 billion KRW in 2020, accounting for about 1.9% of the company’s total sales of 133 billion KRW that year.

If the issue is resolved simply by the disposition of these 38 products (2.5 billion KRW), the company’s image may be damaged, but the impact on business performance would be limited. In this case, the stock price is expected to stabilize. Although unlikely, a second scenario is that if the Ministry of Food and Drug Safety’s investigation results in strong additional administrative sanctions, it could affect the company’s performance and weaken stock price momentum. Researcher Ha Tae-gi of SangSangIn Securities explained, "At this point, it is necessary to confirm the investigation results from the Ministry of Food and Drug Safety, and it is estimated that the outline of the results can be confirmed within the next one to two weeks."

Olipass experienced a significant stock price drop after announcing disappointing clinical data. Researcher Ha stated, "In the February 22 report, I noted that now is the time to focus on clinical data expected to be announced around March. I anticipated that the stock price volatility would increase depending on the results of Olipass’s non-opioid analgesic OLP-1002’s Phase 1b clinical trial in Australia in March. Unfortunately, the Phase 1b results (targeting patients with hip/knee arthritis, administered 5 micrograms and 10 micrograms) showed that the placebo group had the greatest pain reduction effect, and there was no statistically significant difference compared to the treatment groups."

The scenario that expected a licensing-out (L/O) contract with multinational pharmaceutical companies based on good Phase 1b clinical data has, for now, sunk below the surface, and the stock price has declined accordingly. Generally, Phase 1 clinical trials prioritize safety evaluation, and the full efficacy verification is conducted in Phase 2 trials. Since Olipass confirmed safety in the UK Phase 1 trial, it plans to proceed normally with the scheduled global Phase 2a trial in the second half of the year, which will test efficacy and safety in patients with pain. The results of this trial need to be observed.

The global Phase 2 trial is expected to be conducted in Europe and other regions, possibly by increasing the dosage of the administered drug from the current 5?10 micrograms. Although the Australian Phase 1b results of the underwhelming non-opioid analgesic OLP-1002 have been announced, the pipeline’s value verification is not yet complete. Researcher Ha projected, "The Phase 2 trial will be conducted in the second half of the year, and the final efficacy results are expected to be confirmed around the second half of 2022," adding, "Considering only OLP-1002, it will take time for the stock price momentum to recover."