Shinpoong Pharmaceutical's Market Cap Soars from 0.8 Trillion to 5 Trillion in 3 Months, Surpassing Hanmi Pharmaceutical

[Asia Economy Reporter Koh Hyung-kwang] The stock price of Shinpung Pharmaceutical has surged more than sixfold in the past three months, pushing its market capitalization beyond 5 trillion won. The stock price soared in a short period after news spread that the antimalarial drug 'Piramex' is being repurposed and developed as a treatment for COVID-19. However, since Hanmi Pharmaceutical, a leading company in the pharmaceutical and bio sector, has a market cap hovering around 3 trillion won and the possibility of developing a treatment remains uncertain, caution is advised when investing.

According to the Korea Exchange on the 22nd, Shinpung Pharmaceutical's stock price rose 214% in just three weeks, from 30,200 won at the end of last month to 94,900 won yesterday. This month, the stock price has risen for 13 consecutive trading days, except for a single day of decline on the 1st. On the 20th, it even hit the daily price limit increase of 30%. Compared to the stock price on April 3rd (15,400 won), it has surged more than sixfold (516.23%) in about three months. Due to the rapid price increase, the Korea Exchange issued an investment warning on the 14th and suspended trading for one day on the 21st citing it as a risky stock.

The rapid rise in stock price is due to news that the antimalarial drug 'Piramex' is being developed as a COVID-19 treatment. Currently, Phase 2 clinical trials are underway. According to the clinical trial registration site of the U.S. National Institutes of Health (NIH), the primary completion date for Shinpung Pharmaceutical’s Piramex Phase 2 trial is scheduled for December this year, with the final completion date in February next year. According to the company, Piramex has shown inhibitory effects against the COVID-19 virus. When the two components of Piramex, pyronaridine and artesunate, were combined, a virus titer inhibition rate of over 99% was observed after 24 hours, with sustained efficacy up to 48 hours, while cytotoxicity was reduced.

Shinpung Pharmaceutical’s market capitalization, which was just over 800 billion won three months ago, jumped to 5.0282 trillion won as of yesterday, ranking 49th on the KOSPI. This is not only higher than Hanmi Pharmaceutical’s market cap (2.9133 trillion won, 73rd) but also surpasses major domestic conglomerates such as LG Display (4.6873 trillion won, 50th), Hyundai Glovis (4.575 trillion won, 51st), and POSCO Chemical (4.5436 trillion won, 52nd).

Even considering the development of a COVID-19 treatment, there is an assessment that the recent stock price increase is excessive. A financial investment industry official said, "Last year’s operating profit was only 2 billion won, and the company mainly focuses on generic drugs rather than new drug development, yet it is receiving an excessive valuation. Even if it develops a COVID-19 treatment, it will take a lot of time, so investors should exercise caution."

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