Curatis, Penny Stock Just One Year After Listing

Curatis, a developer of vaccines and immune disease therapeutics, has sought additional funding just one year after its listing. The company has consistently invested in clinical costs for the development of its tuberculosis prevention vaccine (QTP101), resulting in a cumulative net loss of 15 billion KRW in the first half of this year. Doubts about its status as a going concern have grown after receiving a 'qualified' opinion on its semi-annual review.

According to the financial investment industry on the 22nd, Curatis's stock price has fallen 59% since the beginning of this year. After closing at 2,185 KRW at the end of last year, the stock price dropped to around 900 KRW within eight months. This represents a 77% plunge compared to the initial public offering (IPO) price of 4,000 KRW when it was listed on June 15 last year.

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Earlier, Samjong Accounting Corporation submitted Curatis's semi-annual financial statement review report on the 14th. The firm explained that it conducted an external investigation related to major contractual transactions concerning vaccine development but was unable to obtain sufficient and appropriate evidence. It issued a qualified opinion, stating that it could not determine the impact on the financial statements.

In the first half of this year, Curatis recorded an operating loss of 9.15 billion KRW and a semi-annual net loss of 15.03 billion KRW. With current assets 6.2 billion KRW less than current liabilities, it was judged that there exists uncertainty that raises substantial doubt about the company's ability to continue as a going concern. This is a result of ongoing cash outflows due to clinical trial expenses. Although the company was in a state of capital erosion before listing, its financial structure temporarily improved by issuing new shares for the KOSDAQ market listing.

Curatis is developing the tuberculosis prevention vaccine 'QTP101,' which is a tuberculosis vaccine for adults and adolescents that enhances the immune response formed by the BCG vaccine. In 2021, it completed Phase 2a clinical trials for adults and Phase 1 clinical trials for adolescents in South Korea. From June 3 to 6, it participated in 'BIO USA' held in San Diego, USA, where it discussed technology transfer with multinational pharmaceutical companies.

Using funds raised through its IPO last June, Curatis is conducting Phase 2b/3 clinical trials of QTP101 in South Korea and Southeast Asia. In the Phase 2b stage, it plans to confirm the optimal dosage and administration method with 288 participants, followed by Phase 3 trials involving 7,461 participants to evaluate safety and efficacy.

Most of the funds raised through the IPO were used last year, and Curatis is currently experiencing financial difficulties. Its current cash and cash equivalents amount to only 1.1 billion KRW. The board recently resolved to raise operating funds by issuing new shares through a rights offering. New shares will be issued at a ratio of 0.54 shares per existing share. The planned issue price is 775 KRW, which is 14% cheaper than the previous day's closing price of 902 KRW.

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