Shares of all nine listed affiliates of HLB, a Kosdaq-listed biotech company, plunged on Friday to their daily price floors, as the U.S. Food and Drug Administration (FDA) rejected a new drug approval for Rivoceranib, the Korean firm’s liver cancer treatment.HLB Chairman Jin Yang-gon said on his company’s official YouTube channel on Friday morning that he received a complete response letter (CRL) from the FDA at 6:45 a.m. that day, regarding the combination therapy of Rivoceranib and Camrelizumab, an anticancer drug made by Jiangsu Hengrui, HLB’s Chinese partner.A CRL is a notice issued by the FDA indicating that an application will not be approved in its present form.After the live streaming, investors of HLB affiliates, who anticipated a U.S. approval, dumped nearly 5 trillion won ($3.7 billion) worth of the biotech company’s shares, indicating their disappointment at the decision.
Before the announcement, HLB’s stock price rose gradually throughout this year from 43,050 won on Jan. 2 to 95,800 won on Thursday, allowing the pharmaceutical firm to become the second-largest company on the secondary Kosdaq market in terms of market cap.However, HLB’s market cap fell below 9 trillion won on Friday from over 12 trillion won a day earlier.Jin attributed the FDA’s rejection mainly to problems related to Camrelizumab, saying that the U.S. authorities appear dissatisfied with the Chinese firm’s response to criticism of its manufacturing process.“The FDA did not mention any problems related to Rivoceranib,” he said. “Jiangsu Hengrui needs to fix some problems, so we will talk with the company immediately to settle this matter.”The chairman added that the ongoing Russo-Ukrainian War blocked the FDA officials from inspecting Russian and Ukrainian hospitals, where clinical trials had been done to check whether the therapy is also effective for Caucasians.“All of our employees did our best to meet the expectation of our shareholders by getting the new drug approval from the U.S. this time,” he said. “We deeply apologize for another delay in the launch of 안전 our new drug.”