Jun Ji-hye, a reporter at the finance desk of The Korea Times, focuses primarily on economic policy and government agencies, mainly covering the Ministry of Finance and Economy, the Ministry of Budget and Planning, the National Tax Service and the Korea Customs Service. She previously covered financial authorities, including the Financial Services Commission and the Financial Supervisory Service, and earlier worked on the political, city and business desks, reporting on a wide range of issues.
Roller coaster stock: Sam Chun Dang Pharm surges over 400%, then plunges amid doubts
Sam Chun Dang Pharm's headquarters in Seoul / Courtesy of Sam Chun Dang Pharm
By Jun Ji-hye
CEO scraps $166 mil. block deal amid trust concerns, vows no share sale until performance proven
Sam Chun Dang Pharm, which once topped the Kosdaq by market capitalization, has been experiencing heightened volatility in recent weeks, drawing intense investor attention, industry officials said Monday.
The stock briefly rose to 1.18 million won ($783) per share late last month, buoyed by strong optimism surrounding its oral insulin project and a licensing deal with a U.S. partner, lifting the company to the top of the Kosdaq. However, allegations that the deal had been overstated, along with doubts about the sustainability of the rally, soon sparked controversy and sent the share price tumbling by nearly half within just three days.
CEO Chun In-seok, the company’s largest shareholder, sought to contain the fallout by canceling a planned large-scale block sale and holding a press conference.
Earlier on Monday, the company said Chun had withdrawn his plan, first disclosed on March 24, to carry out a 250 billion won block sale. He had intended to sell 265,700 shares through after-hours transactions between April 23 and May 22 to raise funds for gift tax and other tax liabilities.
Reversing the course, he cited mounting market skepticism and concerns over shareholder value.
“While our recent deal contained no misstatements or exaggerations, persistent negative speculation continued to weigh on investors,” Chun said. “As CEO, I chose to prioritize safeguarding the company’s intrinsic value over addressing my personal financial obligations.”
Chun added that the required funds would instead be raised through alternative financing options, such as stock-backed loans, instead of selling shares.
“By taking on the financial burden, including interest costs, the major shareholder intends to support share price stability,” he said. "No stake sale would take place until the firm's business performance is sufficiently validated in the market."
According to the Korea Exchange (KRX), shares of Sam Chun Dang Pharm, which closed at 232,500 won at the end of last year, have seen sharp swings in recent weeks.
The rally began on March 19, when the company announced it had filed an Investigational New Drug application in Europe for a Phase 1/2 clinical trial of its oral insulin candidate. Investor sentiment strengthened further the next day after Korea Investment & Securities issued a favorable report, pushing the stock up 14.1 percent to 907,000 won.
This lifted the company’s market capitalization to about 21.3 trillion won, allowing it to surpass EcoPro and become the largest firm on the Kosdaq.
Additional momentum came from news of a licensing agreement with a U.S. partner covering generics of an oral diabetes drug and an oral obesity treatment. The stock climbed to 1.18 million won on March 30, marking a 409.2 percent increase from its end-2025 closing price and the highest level in its history.
The rally, however, proved short-lived. The share price fell sharply to 829,000 won on March 31, before extending losses to 744,000 won on April 1 and 609,000 won on April 2.
Market observers attribute the steep decline largely to growing doubts over the details of the company’s licensing agreements. Although the deal was reportedly valued at around 15 trillion won, the company did not disclose its partner. An unconventional profit-sharing structure also heightened investor concerns.
Adding to the uncertainty, a blogger raised allegations of stock price manipulation, citing 12 suspected irregularities, including possible earnings overstatements, further undermining investor confidence.
Regulatory actions compounded the situation. On March 31, the KRX issued a preliminary notice designating the company as an inadequate disclosure entity. The following day, it classified the stock as an overheated issue, amplifying market volatility.
In response, the company argued that the issue was not related to its overall earnings, but stemmed from media reports focusing on profit estimates for just one product among more than 200, which triggered a procedural response from the exchange.
The company also said the recent decline in the share price was not due to weakened fundamentals, but rather the result of malicious rumors and short-selling activity.
Addressing controversies over the substance of its technology and allegations of the inflated contract, Chun said the decision not to disclose detailed patent information was a strategic move to prevent premature exposure of core technologies.
He also underscored the credibility of the technology by releasing official materials submitted to the U.S. Food and Drug Administration.
“I will not yield to claims that this is a scam. I will demonstrate the company’s value through execution and performance,” he said.
The firm emphasized that the finalized contract includes a binding sales forecast over a 10-year period.
Market watchers said the episode highlights the biotech sector’s structural issue of information asymmetry.
“A biotech company’s valuation can vary significantly depending on clinical outcomes and contract terms, but without reliable ways to verify such information, investor expectations can easily become overstretched, leading to sharp price swings,” a source in the investment industry said.