Market Cap Drops from 8th to 61st... Meditox's Value Slashed to One-Third in Two Months

[Asia Economy Reporter Koh Hyung-kwang] Medytox's market capitalization has recently shrunk to one-third over the past two months. Following the impact of the novel coronavirus disease (COVID-19), the decline deepened as Medytox's main product was ordered to halt sales.

According to the Korea Exchange on the 28th, Medytox closed at 104,900 KRW, down 4.6% from the previous trading day. This is the lowest level in about 6 years and 7 months since September 11, 2013, when it was 101,800 KRW.

Until two months ago, Medytox's stock price fluctuated in the 300,000 KRW range, but with the spread of COVID-19, it fell below 200,000 KRW last month. Recently, the sales suspension order from the Ministry of Food and Drug Safety intensified the downward trend, making it precarious to maintain even the 100,000 KRW level. In particular, the main product 'Medytoxyn' dropped to the price limit on the 20th, when its sales were suspended, and plummeted 45.0% over the last six trading days alone.

The sharp drop in stock price also significantly reduced the market capitalization. Based on the closing price the day before, Medytox's market cap was 627 billion KRW, which means 1.1349 trillion KRW evaporated compared to the market cap of 1.7619 trillion KRW on February 26. In just two months, the market cap shrank to one-third. Its market cap ranking on KOSDAQ also plummeted vertically from 8th place two months ago to 61st place the day before.

The plunge in Medytox's stock price was more influenced by the Ministry of Food and Drug Safety's sales suspension than by the COVID-19 impact. After the Ministry ordered the suspension of manufacturing and sales of Medytox's botulinum toxin product (Botox) Medytoxyn and initiated administrative procedures to cancel the product's approval, the stock price dropped sharply. Hong Ga-hye, a researcher at Daishin Securities, explained, "The cancellation of the main product Medytoxyn's approval has lowered its market share in the domestic Botox market and caused considerable damage to product trust and corporate image, shaking the stock price significantly."

This incident has made Medytox's entry into the Chinese market uncertain and is expected to negatively affect future performance. Kim Seul, a researcher at Samsung Securities, predicted, "The cancellation of Medytoxyn's approval will not only reduce toxin sales but also delay additional approvals in China and negatively impact the US International Trade Commission (USITC) lawsuit. From the second quarter, the absence of domestic sales of Medytoxyn will inevitably worsen performance."

Medytox denied any issues with the safety and efficacy of its products, appealed against the Ministry's order, and promptly filed an administrative lawsuit, but the stock price has shown little movement. On the other hand, competitor Hugel's stock price rose 12.4% over the past week, and its market cap ranking rose two places to rank 10th on KOSDAQ. Koo Wan-sung, a researcher at NH Investment & Securities, said, "Medytox and Hugel share more than 80% of the domestic Botox market. Due to Medytox's sales ban, Hugel gains a windfall benefit, and the fact that Hugel's products are awaiting approval in China is also positive."

This content was produced with the assistance of AI translation services.