Iran Shock...iNtRON Rises as Bio Sector Plunges[K-Bio Pulse]

[Han Kwangbeom, Edaily Reporter] On the 4th, the massive geopolitical risk of imminent war in the Middle East, triggered by airstrikes from the U.S. and Israel on Iran caused a "BlackWednesday" shock.

In this turmoil the pharmaceutical and biotech sectors became a graveyard of panic selling. The KRX Healthcare Index recorded a steep decline significantly exceeding the market average by more than 3 percentage points.

In the KOSDAQ market alone more than 40 stocks saw their prices vanish by over 10%. As macro level war risks triggered the inherent risks and supply demand imbalances of individual companies investors rushed to sell off assets to secure cash moving away from rational valuation.

As of the closing bell Hyundai ADM recorded the steepest decline in the sector. The stock plummeted 29.98% closing at 10,580won, hitting the daily lower limit. The crash is attributed to a combination of external war variables, a decline in internal trust, and a delayed explosion of profit taking following its recent surge.

Until recently Hyundai ADM’s stock price had recorded a historic growth rate of 1,200% compared to its three year low of 868won, garnering significant market attention. However, this "overheating" turned toxic in the face of today’s wartime-like market collapse.

Hyundai ADM stock trend on Mar 4.(Image=MP Doctor)

◇Overheated Stock Price and Shaken Trust Hyundai ADM Hits Daily Lower Limit Following Record Surge

In the face of extreme fear, investors instinctively moved to liquidate high-performing stocks to secure liquidity, making short-term gainers like Hyundai ADM the primary targets. In this crisis, the desire to lock in profits took precedence over future valuations, creating a vicious cycle of sell-offs.

The aftermath of a delayed disclosure last month added fuel to the fire. Hyundai ADM had failed to submit its audit report by the legal deadline of 3:30 PM on the 26th of last month, landing it on the Korea Exchange's list of non submitting companies.

Although it avoided the worst-case scenario of delisting by submitting the report late at 6:04 PM that day, analysts noted that the resulting crack in market trust was significant.

Orum Therapeutics, another biotech blue chip also saw a historic decline of 22.50%, closing at 104,000won, down 30,200won from the previous day. Orum had been trading near its record highs exceeding the 130,000won mark bolstered by its recognized DAC (Antibody Drug Conjugate) technology.

However as the liquidity crisis hit institutional and foreign investors shifted to a strategy of securing cash by selling off their most profitable holdings. Essentially supply demand driven profit-taking, rather than a decline in corporate value, triggered the sell off.

Furthermore as thewon/USD exchange rate threatened the 1,500won mark the burden of dollar denominated costs for overseas clinical trials became a concern. Concentrated attacks from short sellers on high valuation stocks also contributed significantly to the decline.

Moreover, Orum Therapeutics raised approximately 290 billionwon in large scale funding between late last year and early this year, with the issue price set in the 90,000won range. As the stock price fell sharply the fear of potential dilution from convertible preferred stocks further dampened buying interest.

ITCHEM stock trend on Mar 4.(Image=MP Doctor)

◇Blue Chip Stocks Falter Amid Foreign and Institutional Exodus ITCHEM Plummet by 20%

ITCHEM also recorded a massive drop of 22.42%. The company was identified as being at high risk of direct damage from rising raw material prices and supply chain disruptions due to the war.

Given the nature of fine chemical and bio material production which relies heavily on imports and is sensitive to oil price fluctuations fears grew that the spike in oil prices following the conflict would lead to an explosion in cost burdens.

ITCHEM’s downward trend already weakened by a lack of support levels was exacerbated by a combination of disappointment selling and margin calls as investors panicked over the war news. Concerns that a Middle East logistics crisis could paralyze overall exports and imports further accelerated the exodus.

Curacle also dropped 19.90%, closing at 14,210won. Despite announcing new U.S. patent news for its diabetic nephropathy treatment CU01 the previous day the market reacted with "selling on the news." Curacle’s stock had surged by over 120% in the two months following its Phase 2b clinical success in January.

With the stock already in an overheated zone the positive disclosure provided an opportunity for early buyers to realize profits. Specifically the notification of the additional listing of 147,427 shares of convertible bonds (CB) on the 26th of last month acted as an "overhang" (a large block of pending sell orders) during the crash.

While the volume is not overwhelming relative to total floating shares, analysts evaluated that even small supply burdens acted as a major deterrent to buying sentiment in a panic-stricken market.

Other large cap stocks in the sector also recorded high declines of over 10%, dampening the overall sector. Declines included △Samsung Biologics (-9.82%) △Celltrion (-12.27%) △Alteogen (-13.05%) △Samchungdang Pharm (-14.46%) △Yuhan Corp (-13.24%) △Hanmi Pharm (-16.29%) △HLB (-15.53%). Foreign investors aggressively withdrew passive funds from the Korean market, particularly from KOSDAQ large caps as safe haven sentiment strengthened.

iNtRON Bio stock trend on Mar 4.(Image=MP Doctor)

◇Substance Over Dreams as a Safe Haven iNtRON Bio Hits Daily Upper Limit on Patent Success

Amidst this chaos iNtRON Bio stood out as the sole outperformer, hitting the daily upper limit of 29.96%. The surge was driven by a renewed market focus on the tangible technical achievements and commercialization strategies of its botulinum toxin alternative "iN-SIS5."

Recently iNtRON Bio received a patent registration decision in South Korea for iN-SIS5. This signifies more than a mere application it means the company has legally secured exclusive rights after passing a rigorous examination.

The patent covers both the substance rights of iN-SIS5 and its application in cosmetics. Furthermore iN-SIS5 has already completed registration with the International Nomenclature of Cosmetic Ingredients (INCI) and domestic cosmetic ingredient lists.

To expand the industrial application of iN-SIS5, iNtRON Bio is also applying for patents in the medical field and seeking rights in major overseas markets including the U.S., China, Japan, and Europe.

Strategic partnerships, such as a joint business with the cosmetics specialist "Nordmason" and collaboration with "DermaJec" for microneedle product development acted as strong drivers in today’s crash.

Additionally iNtRON Bio is working on securing a foothold for global market entry by signing a contract with a U.S. consulting firm for FDA GRAS certification of its "Heme" component a key raw material for alternative meat.

While stocks relying on vague expectations collapsed under war fears iNtRON Bio attracted buying interest by highlighting its unique patent based rights and concrete paths to monetization through strategic alliances.

An industry insider commented "External geopolitical crises have brought the latent risks of individual companies to the surface."

adding "For the time being, the market is likely to undergo a period of separating the wheat from the chaff, focusing on stocks with actual fund-raising capabilities and visible commercialization results."