Investors furious over Hanmi's report delay
Hanmi Pharmaceutical CEO Lee Gwan-sun bows before a press conference on the company’s disclosure delay and possible side effects of its lung cancer treatment Olmutinib at the company headquarters in Songpa-gu, southeastern Seoul, Sunday. / Yonhap
By Jhoo Dong-chan
Hanmi Pharmaceutical is under fire for posting both favorable and unfavorable factors two days apart, causing confusion and damage to its investors. They suspect the company of intentionally posting the unfavorable factors belatedly, but the Hanmi Pharmaceutical CEO said that wasn’t the case.
“It was never intentional,” said Hanmi Pharmaceutical CEO Lee Gwan-sun during a press conference at the company’s headquarters in Songpa-gu, southeastern Seoul, Sunday.
“We received notice of the cancellation of the contract from Boehringer Ingelheim on Thursday 7:06 p.m. via email. The posting about Boehringer Ingelheim’s decision was delayed because it took time for the company to take appropriate procedures for approval under the stock exchange regulations.”
Hanmi Pharmaceutical’s shares started off strong early on Friday at 649,000 won, a 4.7 percent jump from Thursday’s 620,000 won.
Thirty minutes after the market opened at 9 a.m., Hanmi Pharmaceutical announced in a statement that the Germany-based pharmaceutical company has canceled a deal on clinical development of a lung cancer treatment Olmutinib.
Hanmi Pharmaceutical’s shares closed at 508,000 won on the day, down by 18.06 percent from Thursday.
Investors are doubting over the company’s moral hazard as Hanmi Pharmaceutical’s shares also marked strong on Thursday over news that the U.S.-based pharmaceutical giant Genetech had signed a license agreement on exclusively developing a new drug to treat cancers.
Hanmi Pharmaceutical is expected to received $80 million in upfront and up to $830 million later under the deal. Thanks to the good news, the company’s share marked at 620,000 won on Thursday, up by 0.97 percent from the previous session.
Hanmi Pharmaceutical is also suspected of concealing its new lung cancer treatment candidate HM61713’s side effect of severe skin toxicity in the second phase of clinical trials carried out by Boehringer Ingelheim.
Two people were reportedly killed during the trial, according to the Ministry of Food and Drug Safety, Friday.
Of 731 patients who took the company’s lung cancer drug, “Olita Tab,” or its component name Olmutinib (HM61713), three people, or 0.4 percent, have shown severe skin toxicities, including Stevens-Johnson Syndrome. The ministry has distributed safety letters over Olmutinib’s possible side effects.
“One died of the drug’s side effects while another died of underlying disease,” said Hanmi Pharmaceutical Vice President Son Ji-woong. “We immediately reported to the Ministry of Food and Drug Safety within two weeks. But we were not asked to get re-approval for the drug with the ministry.”
Hanmi Pharmaceutical CEO Lee Gwan-sun said the company will continue developing the new drug for cancer treatment.
“We closely consult with the government agency about the drug’s side effect. The development of the new drug won’t be bailed even if a patient dies during the trial,” Lee said.
Hanmi Pharmaceutical wowed the nation’s drug market with blockbuster licensing deals amounting to 8 trillion won ($6.42 million) with Boehringer Ingelheim in July 2015.