이 기사는 2019년 10월 28일 08:00 thebell 에 표출된 기사입니다.

South Korean biotechnology companies that lost almost half the value in the second half of the year are beginning to gain ground while worries on sudden turnaround linger in the stock market.

The country's biotechnology shares have been on a roller-coaster over the last few months. Some shares have surged almost ten times since August.

The turnaround was led by HLB. After announcing its top-line results in June, HLB's shares plummeted to 20 thousand won in August. However the company's stocks have been rallying with HLB reaffirming the successful trial result and the company's likely pre-new drug application meeting with U.S. Food and Drug Administration on October 24. The Kosdaq-listed HLB's shares exceeded 180 thousand won and the market capitalization which was under one trillion won increased to seven trillion won. Now HLB is threatening to unseat Celltrion, the largest company on Kosdaq by market capitalization.

Shares of other biotechnology companies that are conducting phase three clinical trials such as SillaJen and Helixmith also have recovered ground.

The recent share price movement of companies conducting phase three clinical trials are affecting biotechnology firms on the Kosdaq market. Valuations of biotechnology companies, which have suffered in the second half of the year, are rising again. In addition, the fact that shares of U.S.-based Biogen soared also boosted domestic biotechnology stocks. Biogen recently surprised investors by saying its Alzheimer's treatment was ready to start the regulatory approval process.

On the other hand, South Korean biotechnology companies that are in the initial public offering (IPO) pipeline by the end of the year feel uncomfortable with current movement. Jetema and TiumBio submitted securities registration statements and book-building process is around the corner. Medpacto and NovMetaPharma passed preliminary examination and are adjusting the registration statement submission date.

Those companies all haven't set the IPO price yet. "As share prices of listed biotechnology companies rose rapidly, it becomes hard to set a price range. It would be easier to proceed with the listing procedure if the share prices were still low," said an unlisted biotechnology company official.

When stock valuations rocket, investor expect IPO prices to be lower to avoid risks of post-IPO falling stock price. Especially for companies who plan to submit securities registration statements, it is critical to value themselves appropriately amid rising share prices. If the companies set the price too high, they might fail to attract investor interests at the subscription process.

Experts expect Jetema and TiumBio's subscription results will likely serve as a litmus test for forthcoming IPOs. Both companies expect market capitalization of approximately 470 billion won at their listings. Jetema will conduct book-building process on October 30 and 31, while TiumBio will conduct it on November 5 and 6.

(By reporter Min Kyung-moon)