HLB shares plummet upon 2nd FDA rejection of rivoceranib

FDA plans to postpone its decision until camrelizumab’s approval requirements are met

HLB’s stock price hits the floor immediately after opening, market capitalization drops KRW 2.6 trillion in a single day

Stock of 10 listed affiliates, including HLB Global, HLB Life Sciences, and HLB Pharma, also fall simultaneously

The shares of HLB Group affiliates plummeted as HLB's new drug for liver cancer failed to enter the US market again.

 

The total market capitalization of HLB Group stocks evaporated by over KRW 3 trillion in a single day.

 

However, this did not cause a simultaneous drop in domestic bio stocks.

 

HLB Group's 10 listed affiliates evaporate by KRW 3 trillion in a single day upon receiving a second Complete Response Letter (CRL) According to the Korea Exchange on the 22nd, HLB closed at KRW 46,500 on the 21st.

 

This is a 29.97% drop from the previous trading day.

 

The day before, HLB's share price plunged to the price floor immediately after the opening and remained at this price until the closing time.

 

The market capitalization evaporated by KRW 2.6147 trillion in a single day as the stock price hit the floor.

 

HLB's market capitalization was KRW 8.7241 trillion based on the closing price on the 20th, but it plunged to KRW 6.1095 trillion based on the closing price on the 21st.

 

HLB's share price fell sharply after its new drug for liver cancer failed to enter the US market.

 

HLB said on its official YouTube channel at 3 a.m.

 

on the 21st that it had received a CRL from the US Food and Drug Administration (FDA) for its rivoceranib+camrelizumab.

 

In May last year, the company received a CRL completed the supplementary work, and submitted the required documents for a second review, but received another CRL.

 

Upon the news of HLB’s CRL receipt was announced, the share prices of HLB Group’s stocks fell across the board.

 

HLB Global, HLB Life Sciences, HLB Pharma, and HLB PanaGene all recorded the lowest opening price on the 21st.

 

The opening prices of HLB affiliates on the 21st were KRW 2,535 for HLB Global, KRW 5,990 for HLB Life Sciences, KRW 17,100 for HLB Pharma, and KRW 1,665 for HLB PanaGene, down 29% from the previous trading day.

 

HLB bioStep and HLB Innovation also opened at a price 26% lower than the previous day's closing price.

 

HLB Genex and HLB Science opened at a price 21% and 15% lower than the previous day's closing price.

 

The ten HLB Group’s listed affiliates showed a downward trend throughout the day.

 

HLB (-29.97%), HLB Life Sciences (-29.94%), and HLB Pharma (-29.92%) closed at the floor price.

 

HLB Global (-18.09%), HLB Genex (-15.54%), HLB Science (-14.95%), HLB bioStep (-14.71%), HLB PanaGene (-14.32%), HLB Therapeutics (-7.37%), and HLB Innovation (-6.60%), also closed at a low price.

 

As a result, KRW 3.3226 trillion of the total market capitalization of HLB Group shares was lost in a single day.

 

As of the closing price on the 20th, the market capitalization of the 10 listed affiliates of HLB Group totaled KRW 12.924 trillion.

 

As of the closing price on the 21st, the total market capitalization of these affiliates was KRW 8.7698 trillion.

 

As of the closing price on the 21st, KRW 8 trillion of the market capitalization of HLB Group stocks had evaporated compared to the end of last month.

 

The stock prices of HLB Group's listed affiliates suddenly soared on the 27th of last month.

 

The analysis was that the rise was the result of the combined expectations for new drug approvals and the successive stock purchases of HLB Group Chairman Yang-gon Jin, the owner.

 

At the time, the total market capitalization of HLB Group stocks reached KRW 16.5843 trillion.

 

A similar situation occurred last year when the company received its first CRL.

 

The total market capitalization of the 9 HLB Group’s listed affiliates, excluding HLB Genex, which the company acquired at the end of last year, fell by KRW 5.274 trillion from the previous day on May 17 last year, when the news of the failure to obtain approval for the use of rivoceranib+camrelizumab was announced.

 

At an online press conference on the morning of the 21st regarding the CRL notification, Chairman Yang-gon Jin said, “I think that the shareholders as well as our employees at HLB Group are disappointed by the receipt of this CRL.

 

I would like to express my regrets about this and will actively communicate through meetings after the shareholders' meeting.” However, HLB’s situation did not affect the domestic bio-sector.

 

On the 21st, Sam Chun Dang Pharm, Kolon TissueGene, and LigaChem Biosciences showed a strong trend despite the news of the CRL for rivoceranib+camrelizumab.

 

On the 21st, the closing price of Sam Chun Dang Pharm was KRW 188,800, up 7.64% from the previous day.

 

The closing prices of Kolon TissueGene and LigaChem Biosciences on the 21st also rose 6.88% and 1.72%, respectively, from the previous day.

 

Peptron (+4.29%), PharmaResearch (+2.35%), and Hugel (+1.21%) also closed up.

 

This is in contrast to a past case in which the failure of a company to receive approval for a new drug dampened investment sentiment in the entire biotech industry.

 

Domestic biotech stocks fell in tandem shortly after the announcement of the suspension of the clinical trial of SillaJen's liver cancer treatment 'Pexa-Vec' in 2019 and the failure of its clinical trial on Helixmith's diabetic neuropathy (DPN) gene therapy ‘Engensis' (VM202) in 2020.

 

As a result, investor sentiment froze, and biotech stocks experienced dark ages for a while.

 

Acquired from Bukwang Pharmaceutical in 2018, final data released at ASCO last year demonstrated OS extension Rivoceranib is an oral targeted anticancer drug of the vascular endothelial growth factor receptor 2 (VEGFR2) inhibitor class, which is involved in the formation of new blood vessels in tumors.

 

The drug was developed in 2005 when US-based Elevar Therapeutics bought the global rights to rivoceranib from the Advenchen Laboratories.

 

Bukwang Pharmaceutical, which recognized the potential of rivoceranib, secured the rights to sell the drug in Korea, Europe, and Japan from Elevar Therapeutics in 2009.

 

HLB Life Sciences acquired the development rights to rivoceranib from Bukwang Pharmaceutical in 2018 for KRW 40 billion.

 

HLB then acquired the product patent rights for rivoceranib in 2020 and capitalized on it as its material.

 

HLB has been developing a rivoceranib+camrelizumab combination therapy with Jiangsu Hengrui Pharmaceuticals as a treatment for liver and stomach cancer.

 

Camrelizumab, which was developed by Jiangsu Hengrui Pharmaceuticals, is an immuno-oncology drug that inhibits the PD-1 protein expressed on the surface of immune cells (T cells), preventing them from binding to the PD-L1 receptor on the surface of cancer cells and activating immune cells.

 

HLB applied for an NDA to the FDA in May 2023 for the rivoceranib+camrelizumab combination as a first-line treatment for liver cancer.

 

The results of the Phase III CARES-310 study, which was presented by HLB and Jiangsu Hengrui Pharmaceuticals at the 2022 European Society for Medical Oncology (ESMO) Congress, were presented as grounds for its approval.

 

The clinical trial was conducted to compare the efficacy and safety of lenvatinib and camrelizumab with that of Bayer's Nexavar, which is the current standard of care for liver cancer.

 

In the study, rivoceranib+camrelizumab recorded a median overall survival (mOS) of 22.1 months, showing improved results compared to Nexavar’s 15.4 months.

 

This result showed a longer OS than the 19.2 months found with Roche's combination therapy of the immuno-oncology drug Tecentriq and the targeted-oncology drug Avastin, which has been approved as a first-line treatment for liver cancer, and the OS of 16.4 months for AstraZeneca's combination therapy of the immuno-oncology drug Imfinzi and Imjudo.

 

The clinical trials for the combinations comparing the respective combinations with Nexavar monotherapy.

 

The progression-free survival (PFS) of rivoceranib+camrelizumab was 5.6 months, and the objective response rate (ORR) was 33.1%.

 

HLB also released final results that were even better than the clinical phase III trial results previously announced at the American Society of Clinical Oncology (ASCO) meeting last year.

 

According to the results announced by HLB at the ASCO Annual meeting in May last year, the OS of rivoceranib+camrelizumab was 23.8 months, which was longer than the previous results of 22.1 months.

 

HLB has included the additional improved data during re-submission to the FDA.