Stricter Listing Maintenance Requirements Put Bio Material Companies at Risk of Delisting

Excel Therapeutics and Amicogen
On the Brink of Failing Share Price and Market Capitalization Requirements

Two KOSDAQ-listed bio material companies that have set the goal of localizing cell culture media now face delisting after failing to meet listing maintenance requirements. Although they have secured the necessary technology, these companies have not been adopted at domestic or international production sites, leading to insufficient revenue to support listing maintenance. Furthermore, listing requirements have been significantly tightened, resulting in their current situation.

According to the pharmaceutical and bio industry on September 7, Amicogen and Excell Therapeutics, both producers of cell culture media, are at risk of delisting due to failing to meet market capitalization and share price requirements necessary to stay listed, and are facing delisting simultaneously.

On September 4, the closing share price of Excell Therapeutics, which manufactures chemical composition media for cell and gene therapy (CGT), was KRW 1,106, with a market capitalization of KRW 19.1 billion. Since the beginning of July, Excell Therapeutics’ market capitalization has hovered around KRW 20 billion, but since the start of this month it has fallen below the threshold for three consecutive days.

As for Amicogen, which produces enzymes and cell culture media, its share price has dropped over 30% in two months, from KRW 1,417 on July 1 to KRW 986 on September 3. After falling below KRW 1,000 for the first time on August 14, it remained under the threshold for about ten days before barely recovering to KRW 1,013 on the 4th. Both companies have been repeatedly fluctuating near the thresholds. In fact, these two are the only domestic companies producing cell culture media in Korea.

According to the delisting reform measures announced in February this year by the Financial Services Commission and Korea Exchange, starting July 1, the minimum market capitalization requirement for maintaining a KOSDAQ listing was raised from KRW 15 billion to KRW 20 billion. On the same date, a new provision was established targeting so-called “penny stock” companies with share prices below KRW 1,000 for removal from the market. If either of these criteria is unmet for 30 consecutive trading days, the company is designated as an administrative issue; if it then fails to meet the criteria for 45 consecutive trading days within the next 90, it proceeds to the delisting process.

These companies were progressing with commercialization schedules based on the premise of performance requirement deferrals granted under technology special listing. Such companies are given a five-year grace period for insufficient sales revenue after listing, and a three-year grace period for pre-tax continuing business losses. This system takes into account the characteristics of technology firms that require time for product development and commercialization.

However, the application of updated market capitalization and share price standards has changed the situation. Even if performance requirement deferrals are applied, these newly introduced share price and market capitalization standards must be met separately. As a result, these companies now have to surpass new listing maintenance requirements—share price and market capitalization—even before expanding commercialization and boosting revenue.

The mitigation measures announced by the government on September 4 are also unlikely to offer practical help. The financial authorities introduced a measure allowing companies designated as administrative issues due to insufficient market capitalization to transfer to KONEX without liquidation trading, provided they meet either (1) operating profit in two out of the past three years, or (2) operating profit in one year and shareholders’ equity of at least KRW 20 billion. However, Excell Therapeutics has posted operating losses for three consecutive years, thus failing to meet the requirements, while Amicogen does not meet the share price standard, so neither company qualifies for the market capitalization-based relief.

Bio raw materials such as media are considered categories in which revenue occurs even later than new drug development companies. This is because, once adopted in a production process, replacement is not easy. For biopharmaceuticals, a change in media composition can affect cell growth and protein glycosylation patterns, requiring equivalence to be proven to regulators and permission for the change. Considering the cost and time required for such verification, user companies have little incentive to switch to domestic products first. This is why, even with technology and production facilities in place, it takes time to generate actual orders.

Changbin Son, Quality Management Director at Amicogen, attended the 34th Cabinet meeting presided over by President Jaemyung Lee as a citizen panelist last month, emphasizing the need for active adoption by leading domestic bio companies, saying, “Technological localization cannot be considered true localization unless it is utilized in the field.” Up until now, even basic research and industrial media for biopharmaceutical production have relied on foreign companies. Amicogen and Excell Therapeutics are virtually the only KOSDAQ-listed domestic companies that have established commercial-scale production facilities and begun development to bring this supply chain back to Korea.

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