Corona19 Treatment First Barrier Failure Causes 종근당그룹 Stock to Plummet

MFDS "Nafabaltan Injection Fails to Prove COVID-19 Treatment Efficacy"
Jongkundang, Jongkundang Bio, Jongkundang Holdings Plunge
Jongkundang "Will Prove COVID-19 Treatment Effectiveness Through Phase 3 Clinical Trials"

[Asia Economy Reporter Minwoo Lee] Shares of the Chong Kun Dang Group plummeted simultaneously. Although they surged on expectations for a COVID-19 treatment, the authorities judged the treatment's efficacy had not been proven the day before.

As of 11:20 a.m. on the 18th, Chong Kun Dang's stock price recorded 158,000 KRW, down 18.97% from the previous trading day. This contrasts with the previous day's close at 195,000 KRW, up 16.42%. Chong Kun Dang Bio and Chong Kun Dang Holdings showed similar trends. Chong Kun Dang Bio closed up more than 25% the day before but dropped 22.86% to 62,100 KRW on this day. At the same time, Chong Kun Dang Holdings fell 12.24% to 104,000 KRW.

The sharp fluctuations in stock prices were due to the COVID-19 treatment Napabeltan Injection (active ingredient: Nafamostat Mesylate). Previously, Chong Kun Dang completed Phase 2 clinical trials of Napabeltan Injection, a prescription drug used for pancreatitis, in Russia and applied for conditional approval from the Ministry of Food and Drug Safety on the 8th. The application was to add COVID-19 treatment to the drug's indications. Consequently, the stock price, which had been trending upward recently, soared further. Since it was the first domestic company among those that completed Phase 2 COVID-19 clinical trials, such as Green Cross and Daewoong Pharmaceutical, to apply for approval, expectations grew that it would become the second domestic COVID-19 treatment following Celltrion.

However, negative news broke after the market closed the day before. The Ministry of Food and Drug Safety concluded in the first expert advisory step of the three-stage expert consultation process that the efficacy was not proven based solely on the submitted Phase 2 clinical trial results. Accordingly, the external second and third advisory steps, the Central Pharmaceutical Review Committee and the Final Inspection Committee, as well as the approval and review procedures, were not carried out.

Even the securities industry had painted a rosy outlook ahead of the approval application results, but it was dashed. Previously, Hanyang Securities stated that according to the Korea Pasteur Institute, Chong Kun Dang's COVID-19 treatment is 600 times more effective at the cellular level than Remdesivir and set a target stock price of 198,000 KRW. Chong Kun Dang stated, "We will submit data confirming the COVID-19 treatment effect required by the Ministry of Food and Drug Safety through Phase 3 clinical trials."

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