KOSDAQ-listed biotech companies Peptron and HLB experienced severe stock crashes on the morning of July 10, with Peptron falling 28.63% to 113,700 won at 10 AM and HLB hitting the lower trading limit at 36,600 won. The collapses were triggered by distinct setbacks: Peptron CEO Choi Ho-il's statement at a Daejeon bio forum on July 9 that the company's joint research with Eli Lilly excludes tirzepatide—the core ingredient in Eli Lilly's obesity drugs Mounjaro and Zepbound—contradicted investor expectations, while HLB received a Complete Response Letter (CRL) from the FDA on July 10 rejecting its liver cancer drug Rivoceranib due to manufacturing facility issues at partner company Hangzhou Pharma identified during an April inspection. Both companies had attracted significant investor attention for global new drug development prospects.
Peptron CEO Statement Contradicts Tirzepatide Collaboration Expectations
At 10 AM on July 10, Peptron's stock traded at 113,700 won, down 28.63% from the previous session, approaching the lower trading limit. The decline followed CEO Choi Ho-il's remarks at a bio forum in Daejeon on July 9, where he stated that the joint research with Eli Lilly involves "completely different peptide formulations" and "tirzepatide is not included," according to the source. Tirzepatide is the active pharmaceutical ingredient in Eli Lilly's obesity and diabetes treatments Mounjaro and Zepbound.
Investors had expected Peptron's SmartDepot technology—which enables sustained drug release allowing monthly injections instead of weekly doses—would be applied to Eli Lilly's obesity treatments. The companies had signed a Material Transfer Agreement (MTA), a preliminary stage where drug samples are exchanged to test technology compatibility before formal licensing deals. CEO Choi's statement indicated the collaboration may involve undisclosed early-stage candidate compounds rather than the commercially available Mounjaro.
Peptron issued a statement on the morning of July 10 clarifying that "the research is not targeting only one specific commercialized product" and "joint research on multiple substances including next-generation obesity and diabetes treatment candidates is proceeding as planned." The company described CEO Choi's remarks as "personal views on third-party contracts," but the stock continued its decline.
HLB Receives FDA Rejection for Rivoceranib Due to Partner Factory Issues
HLB announced on July 10 that its U.S. subsidiary Eleva Therapeutics received a Complete Response Letter (CRL) from the FDA regarding the liver cancer drug Rivoceranib. At 10 AM, HLB stock hit the lower limit at 36,600 won, with other HLB Group affiliates declining over 20%. The CRL cited issues identified during an FDA inspection of partner company Hangzhou Pharma's manufacturing facility in April.
The FDA conducted a current Good Manufacturing Practice (cGMP) inspection at Hangzhou Pharma's factory in April and issued Form 483 documenting facility deficiencies. The FDA stated that "while these observations may not be issues with the drug itself, approval cannot be granted until it is confirmed that the facility—listed as the manufacturing site in the application—fully complies with standards."
The inspection was a routine facility audit rather than a pre-approval inspection specifically for Rivoceranib, which is why HLB and Eleva Therapeutics were not informed of the inspection or findings in advance, according to the source. Eleva Therapeutics CEO Kim Dong-gun stated on July 10 that "no issues were identified regarding the drug's clinical efficacy or safety data, nor were additional clinical trials requested" and "since the cause is related to the manufacturing facility inspection, we will work closely with the FDA to pursue resubmission as quickly as possible."
FAQ
Why did Peptron Korean stocks fall 28.63% on July 10?
Peptron stock fell 28.63% to 113,700 won at 10 AM on July 10 after CEO Choi Ho-il stated at a Daejeon bio forum on July 9 that the company's joint research with Eli Lilly involves "completely different peptide formulations" and "tirzepatide is not included." Investors had expected the collaboration would apply Peptron's SmartDepot technology to Eli Lilly's tirzepatide-based obesity drugs Mounjaro and Zepbound.
What did the FDA's Complete Response Letter to HLB state?
The FDA issued a Complete Response Letter (CRL) to HLB's subsidiary Eleva Therapeutics on July 10 regarding the liver cancer drug Rivoceranib, citing manufacturing facility issues at partner company Hangzhou Pharma identified during an April cGMP inspection. The FDA issued Form 483 documenting facility deficiencies and stated approval cannot be granted until full compliance is confirmed. Eleva CEO Kim Dong-gun stated no issues were identified with the drug's clinical efficacy or safety data.
How did HLB Korean stocks react to the FDA rejection?
HLB stock hit the lower trading limit at 36,600 won on July 10 following the FDA's Complete Response Letter. Other HLB Group affiliate stocks declined over 20% on the same day.
