Nam Hyun-woo has worked as a staff writer at The Korea Times since 2013, mostly covering business and politics. He currently belongs to the Business Desk where he covers topics such as emerging tech, AI, ICT and Korea's chaebol community. Prior to joining the team, he was the paper's correspondent for the presidential office of Korea during the Yoon Suk Yeol and Moon Jae-in administrations.
Helixmith battles Goldman Sachs over 'sell' rating
By Nam Hyun-woo
Helixmith CEO Kim Sun-young
By Nam Hyun-woo
Domestic gene therapy maker Helixmith is in a battle with Goldman Sachs, as the global investment bank continues to issue reports containing sell rating.
Goldman Sachs on Tuesday issued a report on Helixmith, titled “Next pivotal study progress delays likely,” and maintained its “sell” rating on the company.
In the report, analyst Kim Sang-soo questioned the company's capability in managing clinical trials, the pipeline potential for the next year and the discouraging phase 3-1 study outcome of Engensis, or VM202, a DNA plasmid gene therapy for diabetic peripheral neuropathy.
“Given the higher likelihood of a phase 3-2/3-3 trial delay, which we expect could last six to nine months, we do not expect the commercial outlook for VM202 in the diabetic peripheral neuropathy to improve over the next year,” Kim wrote. “We therefore do not expect any meaningful catalysts to drive the share price substantially higher.”
Kim adjusted Helixtmith's target price to 51,900 won, which is 1.4 percent higher than the brokerages' previous target price, still far lower than the company's closing price on Wednesday of 67,400 won.
Helixmith created a market stir last year, after announcing in September the phase 3-1 trial of VM202 did not draw meaningful results, and there is a possibility of the drug and placebo having been mixed up during the test. Five months later, however, it announced there was no placebo mix-up in the phase 3-1 trial for Engensis.
This is not the first time that Kim issued a critical opinion on Helixmith. In October last year, he downgraded Helixmith to “sell” from “buy” and reduced its 12-month target price by 74 percent to 64,000 won, which caused the actual share price to fall by 15 percent.
After the fresh report on Tuesday night, investors did not react seriously, with the price ending at 67,400 won on Wednesday, down 3.99 percent from a session earlier. Instead, Helixmith issued a statement regarding the report.
In a statement issued on Wednesday, Helixmith said it wants to “clarify facts” regarding the Goldman Sachs report.
Over risks in its clinical trial management, Helixmith said it has 20 experts for clinical trial management, matching that of large pharmaceutical companies in Korea. The company added it recently hired renowned clinical test operator Adam Ruskin as its head of clinical operations and signed a partnership with PRA Health Sciences, one of the top contract research organizations in the world.
The company also claimed it has a number of valuable projects other than VM202, but they are overshadowed by the extraordinary value of VM202. It added that it will announce when those projects reach certain milestones.
Standing as the 13th-largest cap in the Kosdaq bourse, Helixmith is garnering attention among Korea's individual investors, but not many analysts at domestic brokerages are tracking Helixmith, apparently due to the high uncertainties regarding the company's business.
“After revealing the outcome of phase 3-1 trial of VM202, many are questioning our capability of managing risks in clinical trials. We humbly accept that, but we made a lot of efforts for improvement,” Helixmith said. “We believe we can explain this further after producing a successful outcome.”