Rapid Surge After Signing Evaluation Contract for Lily and Sustained Platform Technology
First Paid-in Capital Increase Issue Price at 36,350 KRW... Current Stock Price at 40% Level
Peptron, which partnered with U.S. Eli Lilly to develop an obesity treatment, saw its stock price hit a new all-time high. As the stock price continued to rise, expectations grew for a successful rights offering subscription.
According to the financial investment industry on the 17th, Peptron's stock price rose 100% compared to the closing price on the 7th. During the same period, the KOSDAQ index fell by 2%. On the 16th, the stock price reached 97,700 KRW intraday, setting a new record high.
Previously, on the 7th, Peptron signed a technology evaluation contract with Eli Lilly for a sustained-release platform lasting over one month. Peptron will apply its proprietary SmartDepot platform technology to Eli Lilly's peptide-based drugs. Peptron explained that the contract is limited to internal research and development purposes and for subsequent commercial license agreements.
Minyong Eom, a researcher at Shinhan Investment Corp., stated, "It is believed that Lilly signed a joint research contract involving a down payment to secure the priority for technology transfer," adding, "It is difficult to estimate the impact and market size of a one-month sustained-release obesity treatment if it succeeds." He further explained, "Alteogen also changed its contract with Merck from a non-exclusive agreement in 2020 to an exclusive and sales royalty structure during Phase 3 clinical trials in February this year," and added, "It is estimated that Peptron will sign the main contract upon confirming Phase 1 clinical trial results by the fourth quarter of next year."
With Peptron's stock price surging, the fundraising plan is expected to proceed smoothly. Peptron plans to raise 96 billion KRW by issuing 2.64 million new shares. The issue price will be finalized on the 8th of next month. The initial planned issue price is 36,350 KRW per share, which is only about 40% of the current stock price. Existing shareholders who secure subscription rights certificates can expect a considerable price difference just by selling these certificates. The subscription rights certificates can be traded for five trading days starting from the 29th. The higher the stock price compared to the expected issue price, the more expensive the certificates can be sold.
The Peptron board also allocated 79,200 new shares to the employee stock ownership association. If the current stock price level is maintained, the subscription rate of the employee stock ownership association is also expected to be high.
The raised funds will be used to build a new factory that meets current Good Manufacturing Practice (cGMP) standards and cover research and development (R&D) and clinical trial costs. Peptron is developing peptide new drugs and targeted anticancer antibody drugs. Its main pipelines include a one-month sustained-release diabetes and obesity treatment (PT403) and a prostate cancer treatment (PT105).
The existing factory has a maximum capacity of 1 million vials and will focus on commercial production for domestic sales after obtaining domestic product approval for the prostate cancer treatment. The new factory will produce and supply long-acting drugs targeting overseas markets, such as the one-month sustained-release obesity treatment. Peptron explained that it is expanding investment to secure a global market lead for the one-month sustained-release obesity treatment and aims to obtain rapid commercial sales approval without changing the manufacturing site by producing Phase 3 clinical trial drugs.
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