[Exclusive] 955 of 1000 ShillaJen Shareholder Group Members Already Signed... Complaint Filed Before Market Committee Meeting

[Image source=Yonhap News]

[Asia Economy Reporter Lee Seon-ae] After gathering '1,000 signatures,' the ShillaJen shareholder group plans to submit a complaint to the Korea Exchange and others before the KOSDAQ Market Committee meeting scheduled for the 18th of next month.

As of 2 p.m. on the 26th, 955 people have signed up to participate in the collection of 1,000 signatures required for submitting the complaint. A representative of the ShillaJen shareholder group stated, "We will soon surpass 1,000 signatures and expect the number to continue increasing," adding, "We will first submit one complaint before the Market Committee meeting." They further added, "We are considering submitting a total of three complaints, but it is still difficult to disclose the exact details as we are consulting with a law firm."

Additionally, the ShillaJen shareholder group confirmed that the Korea Exchange’s Corporate Review Committee’s deliberation on ShillaJen’s delisting was conducted abnormally and plans to request an investigation into allegations such as abuse of authority. The shareholder group claimed that the Exchange did not properly conduct discussions during the review process. They reported witnessing ShillaJen company officials coming out after corporate explanations around 5:10 p.m. while holding a rally in front of the Exchange on the 18th. Although they expected additional deliberations following the corporate explanations inside the committee for a long time, several vehicles left around 5:15 p.m., and the police line controlling the rally was immediately lifted.

The shareholder group explained, "From this point, we believe that sufficient review of the corporate explanations was not conducted after a prior decision," adding, "Considering that the committee meeting started at 2 p.m., it is estimated that from 2 p.m. to 5 p.m., the committee was receiving reports from Exchange officials, and then held corporate explanations and Q&A sessions, so it was not a situation where delisting could be clearly decided within about 15 minutes."

On the other hand, the Exchange fully refuted their claims, stating that the review was not rushed. An Exchange official emphasized, "The review was conducted from 2 p.m. to 5:15 p.m., which is exceptional (over 3 hours), allowing sufficient time for explanations and Q&A."

Meanwhile, it was confirmed that the delisting decision for ShillaJen was influenced by whether the clinical trials stated in the improvement plan submitted by ShillaJen were being carried out. The committee and ShillaJen engaged in a prolonged dispute over the execution of these clinical trials.

The committee judged that ShillaJen lacked the will to carry out research and development. They cited failure to conduct clinical trials as per the improvement plan and a shortage of research personnel as grounds. In response, ShillaJen raised their voice, saying, "It is true that research personnel left due to company circumstances, but the workforce has been expanded since the acquisition of M2N." ShillaJen’s R&D organization consists of a total of 15 personnel across four teams under the R&D headquarters and corporate research institute, and three teams under its wholly owned subsidiary ShillaJen Bio. Among them, three hold doctoral degrees and six hold master's degrees. The committee argued that expertise such as physician-scientists needs to be strengthened.

However, the research personnel issue was not a major reason for the delisting decision. The clinical trial execution plan submitted to the Exchange a year ago and the current progress had a significant impact on the delisting decision. The plan to complete some clinical trials by 2021 was not met.

ShillaJen has been conducting kidney cancer clinical trials divided into four groups: A, B, C, and D. At the time of submitting the improvement plan, considering funding shortages, they planned to slow down the newly started D group trial and complete the A, B, and C group trials early by 2021. ShillaJen’s position is that positive signals have since emerged from the D group clinical trial involving 19 subjects. Treatment effects appeared when Regeneron and the oncolytic virus Pexa-Vec were administered together to patients unresponsive to immune checkpoint inhibitors.

The shareholder group explained, "According to a prior agreement with clinical partner Regeneron, clinical efficacy was confirmed around May last year, and in July, it was finally agreed to expand the target patient group," adding, "Contrary to the original plan, the D group clinical trial was expanded, and the end period for the A, B, and C group trials was adjusted to 2022." Although there was a discrepancy in the clinical trial completion period within the improvement plan, ShillaJen emphasizes that they did not fail to carry out clinical trials but rather expanded from A, B, and C groups to include D. Conversely, the committee viewed the failure to complete tasks that should have been finished last year as evidence of a lack of research competitiveness necessary to continue operations.

The shareholder group stressed, "The progress of the D group trial, combining ShillaJen’s Pexa-Vec and Regeneron’s Semiplimab, is proof that the drug efficacy is better than expected and could create better conditions for technology export," emphasizing that the Exchange’s reasons for delisting lack strength and are unacceptable. They requested, "Delisting based on reasons not stipulated in regulations is illegal," and asked the Market Committee, which will be held within 20 business days, to decide on resuming trading.