[Listed At A Crossroads] BL Pharmtech ① CB Players Reap Tens Of Billions After Suspicious Surge

Share Price Soars After CEO Park Youngcheol's Bullish Interview
CB Conversion in the Meantime Yields Tens of Billions of Won in Gains for Investors

The share price of Kosdaq-listed company BL Pharmtech has soared more than tenfold in a short period since the beginning of this year. During this time, it is estimated that investors holding BL Pharmtech's convertible bonds (CBs) could have realized tens of billions of won in gains.

According to the Financial Supervisory Service's electronic disclosure system on the 27th, the "NextG Regional Innovation Industry Fund" and the "Sangsang Contents Investment Association," which are investors in BL Pharmtech's 20th CB, requested conversion of a total of 1 billion won worth of CBs into shares on the 6th. Both are funds for which NextG Investment serves as the general partner (GP).

The 20th CB tranche was issued on October 30, 2023, in the amount of 2 billion won. Conversion has already been possible since October 30, 2024. However, investors neither requested share conversion nor redemption, and held on to the CBs until recently.

This is analyzed as being because BL Pharmtech's share price had continued to be sluggish. The conversion price for this CB is 1,625 won per share. However, BL Pharmtech's share price trended downward and fell to as low as 376 won early this year.

The company's performance and fundamentals are also in poor shape. As of the end of the third quarter of last year, BL Pharmtech posted cumulative sales of 5.7 billion won and an operating loss of 1.7 billion won. Its current ratio was in the 60% range, meaning its liquidity recoverable within one year was smaller than the debt due within one year.

In the midst of this, on January 22, a bio-specialized media outlet published an interview article with BL Pharmtech CEO Park Youngcheol. In this article, CEO Park stated that BL Pharmtech is negotiating technology transfer deals worth "trillions of won" with global pharmaceutical companies based on its molecular glue platform technology.

According to the interview, CEO Park said, "We are conducting technology transfer negotiations for our molecular glue platform technology and several other pipelines with global and domestic pharmaceutical companies that everyone would recognize by name." The article also included his comments that, in relation to the technology transfer, the upfront payment alone would be at least 100 billion won, and that he expects the total contract size could reach the trillion-won range.

Once the article was released, BL Pharmtech's share price surged. On January 22, BL Pharmtech hit the upper price limit and then closed at the limit-up level for eight consecutive trading sessions. On the 10th of this month, it also reached its highest level in about 5 years and 4 months since October 2020. In just about two weeks, the share price jumped from 575 won to 8,150 won, marking a gain of more than 1,300%.

As the share price soared, CB investors hurriedly exercised their conversion rights. The listing date for the new shares from this CB was the 24th. Taking into account rights short selling, BL Pharmtech shares could have been sold from the 20th. On the 20th, BL Pharmtech's share price traded intraday at 5,210 won, up 4%, before closing at 4,625 won, down 7%. If CB investors had sold their shares at the intraday high that day, it is estimated they could have realized a return of about 220%.

Regarding this, BL Pharmtech CEO Park Youngcheol said, "We recovered 8 billion won from investment assets in the fourth quarter of last year, so even if 2 billion won in CBs were to be redeemed, there would be no liquidity problem, and therefore we had no reason to deliberately distribute good news," adding, "We cannot disclose the companies with which we are negotiating molecular glue platform technology transfer because confidentiality agreements have been signed, but recent deal sizes for other companies have been in the range of 1.5 trillion to 3 trillion won, and we benchmarked those."

Meanwhile, BL Pharmtech is currently designated as an investment risk and investment alert issue.

This content was produced with the assistance of AI translation services.