Korean biotech HLB has defended itself against allegations that it misrepresented the recognition it received at the European Society for Medical Oncology (ESMO) annual congress. The dispute centers on HLB’s claim that its phase 3 study was selected as “The Best of ESMO 2019,” an accolade the cancer conference says doesn’t exist.
On Oct. 2, HLB issued a statement that ESMO “selected Rivoceranib's ANGEL Study as 'The Best of ESMO 2019.'” However, a spokesperson for ESMO, responding to questions from Bloomberg, said the trial was only included in a list of highlights on the grounds it generated “interesting results.” There was no “Best of ESMO 2019” award.
“The ANGEL trial was not recognized with any official award during the ESMO Congress,” the spokesperson said. “We regret any inconvenience caused by a misinterpretation of facts.”
HLB defended itself. In a message sent to Bloomberg, HLB said “it is true that our phase III clinical study for Rivoceranib was selected as the Best of ESMO,” adding that it never used the word “award.” HLB also published a release arguing it accurately portrayed the situation in its Oct. 2 statement.
The dispute is given significance by movements in HLB’s stock price in the period after it made the “Best of ESMO 2019” claim.
HLB ended Oct. 1, the day before it issued the “Best of ESMO 2019” statement, with a share price of ₩69,000 ($58.60). By Oct. 7, the stock had climbed 58% to ₩108,900. Over the period of the 58% stock increase, the “Best of ESMO 2019” statement was one of two notices issued by HLB. The other disclosed the appointment of a general manager at its bio business.
The upward trend carried on over the following weeks, leading the stock to top out at ₩185,000 before the end of October. The stock may have risen higher still, but authorities suspended trading due to the steep increase.
HLB is approaching events that could send its stock up or down sharply. The company is working on a New Drug Application for rivoceranib that it aims to have ready in the first half of next year. If HLB hits the target, it could win approval in the U.S. before the end of 2020.
While the regulatory process is far more important than the ESMO dispute, which had minimal effect on HLB’s stock price, the minor scandal over the non-award is still another negative headline for the Korean biotech industry. Kolon Life Science and Sillajen have been hit by big, value-crushing setbacks this year, while Helixmith suffered the ignominy a potential major mix-up in a phase 3 trial.