Celltrion executives are manning the defenses this morning, insisting that the Korean biosimilars company did nothing wrong while confirming that they've fielded regulatory queries about possible insider trading. The allegations come at a particularly awkward time for Celltrion. Company CEO Seo Jung-jin has been looking to sell off his $1.3 billion chunk of stock, which could open the door to a new Big Pharma entry in the field.
Celltrion's shares took a dive after Korea's Yonhap news agency and broadcaster SBS CNBC reported the insider trading allegations, implicating Seo in the probe. But Celltrion--which just days ago benefited from a pioneering regulatory approval of the first antibody biosimilar--blasted back today, denying that anyone had been supplying insider info to investors.
"Celltrion is quite dumbfounded today by the news report of the alleged findings by the Capital Market Investigation and Review Committee of stock manipulation and insider trading in the countermeasures taken against certain abnormal short-selling of Celltrion shares that began in April 4, 2011," says the company in a statement. "While Celltrion participated at a hearing held of the Committee on September 13, 2013, Celltrion was neither aware of nor notified the claims made against it by the Committee before the hearing took place. Celltrion appealed at its best against such claims and did not admitted any of the claims made. No findings of the committee have been provided to Celltrion to date."
This isn't the first time that the company has been accused of shady business dealings. Reuters reports that the company has also had to defend itself against allegations of fraud related to accounting practices as well as clinical trial failures. But it hasn't been hit with a formal investigation until now.
About a week ago the European Commission made healthcare history with its first approval of a biosimilar antibody--Inflectra (infliximab)--which was developed by Celltrion and will be sold by generics powerhouse Hospira ($HSP). The approval came as news reports continue to circulate speculating that AstraZeneca ($AZN) could be negotiating for Seo's stake in Celltrion, which would give it a big stake in biosimilars shortly after CEO Pascal Soriot had tapped the field as a major new interest for the struggling pharma company.
- here's the company's response
- read the story from Reuters