Hanmi Pharmaceutical is Korea’s innovative drug maker. For such a company, it’s hard to understand how the recent snafu over its filing with the stock exchange could be possible. Despite its apology, it is imperative for the authorities to get to the bottom of the incident. The drug maker reportedly has a history of legal trouble as one of its researchers and a stock analyst were detained on charges of conspiring to use undisclosed information on a new drug to earn billions of won in illicit gains.
The latest incident took place as the firm filed good news and bad with the stock market and in the process sent its share price up first before it came down with a hard landing.
The company Thursday made public the signing of a lucrative licensing deal on a substance, called “HM95573,” for breakthrough cancer treatment, with Roche’s Genentech for $80 million up front and an additional $830 million depending on future developments.
Immediately after the Friday trading began, Hanmi’s share price went up about 4.7 percent or 29,000 won from the previous day’s close and reached a daily high 649,000 won ($589).
Thirty minutes later, Hanmi jolted the market with news of the collapse of a key deal with Boehringer Ingelheim, worth $773 million, also for an advanced cancer treatment drug. The German drug maker opted out of the contract it signed with Hanmi in July, having paid $65 million. The stock price sank and closed at 508,000 won.
Now, the investors who bought Hanmi shares during the 30-minute window came down with huge losses.
The drug maker received Boerhringer’s notification for the termination of their contract at 7:06 p.m., Thursday, but filed with the exchange at 9:30 a.m., Friday. In the press conference Sunday, Hanmi claimed that it was an inadvertent procedural delay. “We didn’t want to create confusion by announcing bad news after good,” its CFO told reporters. He said that the filing couldn’t be made the evening before because it was “too important” for those on night duty to handle and that it couldn’t be filed immediately Friday because of discrepancies in the numbers.
The company’s explanation leaves room for question. The authorities need to find out what happened and hold Hanmi responsible for any wrongdoing. Hanmi also needs to improve its management skills to the level required of the nation’s leading bio firm that scored export deals worth $6.1 billion last year alone.