The founder of Celltrion Inc., Korea’s largest biotech company, has seen dramatic slides in his company’s share price since he put up his stake for sale.
According to Wall Street Journal’s article which was published last week, the founder of Celltrion, Seo Jung-jin, states that most of it is short selling, because investors just don’t understand the company.
Seo Jung-jin, put up his stake in Celltrion last week, and since then, shares had faced four sessions of declines, twice dropping 15%. On Friday last week, the declines were smaller: shares dropped 2.3% to 32,300 won ($29).
Mr. Seo owns Celltrion through Celltrion Holdings Co., where he has a 97.3% stake and which owns 20.7% of the biosimilar maker.
“There are so many malicious rumors spread by speculators and we tried to (stabilize share prices) by buying (back) from the market,” said Mr. Seo. He said he had asked the local financial authorities several times to investigate the investors selling.
Choi Soo-hyun, governor of the Financial Supervisory Service, earlier this week asked his staff to check if talk that there was accounting missteps at Celltrion is true and if certain speculators are intentionally spreading false rumors about Celltrion.
Sparking some of the selling, according to analysts, is Celltrion’s accounting treatment: it booked $177.2 million in operating profit last year before its products—mainly Remsima, the biosimilar version of rheumatoid-arthritis drug Remicade–began to be sold outside Korea. It booked that profit after selling the drug to a related firm where Mr. Seo owns 50.3%.
Mr. Seo says Remsima will get approval from European authorities in June, as scheduled, adding that its way of accounting for the drug is in line with the nation’s accounting standards.
“The speculation stems from misunderstanding of the new business area of biosimilar,” said Mr. Seo in an interview with The Wall Street Journal. “Biosimilar requires massive cash for investment. Once we get the EU approval, the suspicion will be resolved.”