6 of the Bottom 10 KOSPI Stocks by Returns Are Pharmaceutical and Bio Stocks

Soaring Last Year as a COVID-19 Theme Stock
Plummeting Amid Rising COVID-19 Vaccination Rates and Clinical Trial Failures of Therapeutics

[Asia Economy Reporter Gong Byung-sun] Among the stocks that underperformed in the KOSPI market this year, a significant number were pharmaceutical and bio stocks.

According to the Korea Exchange on the 19th, as of the 17th, six out of the 10 worst-performing stocks in the KOSPI market this year were bio-related stocks.

Ilyang Pharmaceutical’s preferred shares, Ilyang Pharmaceutical 우 (Ilyang Pharmaceutical Woo), dropped 59.38% from 80,000 KRW at the end of last year to 32,500 KRW on the 17th of this month. This ranks second in terms of decline rate among all stocks. Ilyang Pharmaceutical’s common shares also fell 50.30% during the same period, ranking fourth in decline rate.

Following were Shinpung Pharmaceutical (-47.10%), Chong Kun Dang (-45.25%), and Green Cross Holdings 2우 (Green Cross Holdings 2 Woo) (-39.37%), ranking fifth to seventh in decline rate. HanAll Biopharma’s decline rate was 38.53%, placing it tenth.

These stocks had surged sharply last year as COVID-19-related theme stocks. However, as COVID-19 vaccination rates increased and news of clinical trial failures for treatments accumulated, they plunged.

A representative example is Shinpung Pharmaceutical, whose self-developed malaria treatment Paramax emerged as a COVID-19 treatment candidate, soaring 1612.71% over the past year. During the same period, Shinpung Pharmaceutical 우 (Shinpung Pharmaceutical Woo) rose 1955.37%, ranking first in the KOSPI market’s growth rate last year.

However, as COVID-19 vaccines were successively introduced, Shinpung Pharmaceutical’s stock price began to fall. In April, news of the largest shareholder’s stake sale halved the stock price. In July, Paramax failed to secure significance in Phase 2 clinical trial results, causing the stock to hit the lower limit price.

The index composed of pharmaceutical and bio stocks also remained at the bottom. The ‘KRX Bio K-New Deal Index,’ composed of major bio sector stocks, closed at 3,127.03 on the 17th, down 20.07% from 3,912.26 at the end of last year. This is the largest decline among the exchange’s theme indices. During this period, the market capitalization of the index lost 3.8 trillion KRW.

The ‘KOSPI 200 Healthcare’ and ‘KOSDAQ 150 Healthcare’ indices also recorded declines of 15.77% and 22.86%, respectively. These are the lowest among the KOSPI and KOSDAQ sector indices.

Meanwhile, the stock with the highest increase in the KOSPI market this year was Next Science, which rose 537.04%. Next Science began to surge as it is related to Nanogen, a Vietnamese pharmaceutical company developing a COVID-19 vaccine.