[Click eStock] "Oscotec, Stock Price Depends on Genosco Listing Direction"

On the 28th, Daishin Securities stated that the impact of the management change at Oscotec, whose CEO reappointment proposal was rejected at the regular shareholders' meeting the previous day, would be limited. However, they forecast that the stock price trend would be influenced by the listing direction of its subsidiary Genosco. The investment opinion 'Buy' and the target price of 59,000 KRW were maintained.

At Oscotec's regular shareholders' meeting held the previous day, the reappointment proposal of CEO Kim Jeong-geun, the founder and largest shareholder (with a 12.46% stake) who has managed the company for over 20 years, was rejected with 22.2% in favor and 40.5% opposed. This was the result of small shareholders' coalition systematically opposing Genosco's listing.

Genosco, a subsidiary of Oscotec, is the original developer of 'Reclaza' (active ingredient: Lazertinib), the first domestically produced anticancer drug approved by the U.S. Food and Drug Administration (FDA). In 2015, Oscotec licensed Lazertinib to Yuhan Corporation, which then sublicensed it to Johnson & Johnson (J&J) in the U.S. in 2018. Accordingly, J&J pays a certain percentage of Reclaza sales as royalties (ongoing technology fees), which are distributed as 60% to Yuhan Corporation and 20% each to Oscotec and Genosco.

Oscotec pursued Genosco's listing, citing the necessity of stable funding for Genosco's future research and development (R&D) success. Since Genosco filed a preliminary review for KOSDAQ listing with the Korea Exchange in October last year, small shareholders have expressed strong opposition through four public letters and on-site protests. The core of the small shareholders' opposition is based on concerns that the subsidiary Genosco's KOSDAQ listing could damage the shareholder value of the parent company Oscotec. However, the company did not withdraw its intention to list Genosco, which ultimately led to the rejection of CEO Kim's reappointment proposal.

Lee Hee-young, an analyst at Daishin Securities, analyzed, "Although CEO Kim Jeong-geun's reappointment proposal was rejected, co-CEO Yoon Tae-young will take over management rights, so the management gap is expected to be limited. Positive clinical results continue to be announced for the core pipeline Razclu, and global commercialization is proceeding as planned, so Oscotec's mid- to long-term growth momentum remains valid." He also judged that concerns related to Genosco's listing have already been largely reflected in the stock price.

He added, "If shareholder-friendly decisions are strengthened as a result of this incident, it could be an opportunity for stock price re-rating. However, since the rejection of the CEO reappointment proposal stemmed from small shareholders' opposition to the subsidiary's listing, the stock price trend is likely to be influenced by the future direction of Genosco's listing."