Avoid suspension of exclusive HLB transaction… Possible litigation ↑

HLB, a KOSDAQ listed company under investigation by financial authorities for the results of global phase 3 clinical trials(60,900 -2.56%)It was found that there is a high possibility of avoiding transaction suspension. The Korea Exchange’s position is that in principle, allegations of unfair trade other than fraudulent accounting, malpractice, and embezzlement are not included in the reason for the suspension of the transaction. In the industry, the prospect is predominantly that the financial authorities will file an accusation with the prosecution on the allegations, and then the authenticity will be masked in court.

“This is not the reason for suspension of transaction”

An official of the Korea Exchange said on the 18th, “A transaction suspension is usually taken by the Financial Supervisory Service’s Accounting Review Bureau for reasons such as fraudulent accounting, embezzlement, or misrepresentation, and then an action is taken to the prosecution.” “HLB does not correspond to this.” .

At the end of last year, HLB received a deliberation by the Financial Services Commission’s Capital Market Research Deliberation Committee on the charges of arbitrarily interpreting the results of phase 3 clinical trials of riboseranib at the end of last year. Financial authorities claim that HLB hid it even after receiving opinions that the clinical trial failed in the process of discussing with the US Food and Drug Administration (FDA) the approval of the new oral anticancer drug’Riboceranib’.

It was reported that HLB’s charges were unfair transactions, not false disclosures that were initially known. The clinical trial for riboseranib was performed by Eleva, a subsidiary of HLB, and is not subject to disclosure. It means that it does not fall under the disclosure violation. This is the reason why HLB Chairman Jin Yang-gon held an emergency conference on June 27, 2019, instead of public announcement, and directly announced that “as a result of analyzing the figures released so far, the entire survival period did not reach the final clinical target.” An industry insider said, “Because it was led by the Financial Supervisory Service’s Capital Market Research Bureau, it is highly likely that it will be handed over to charges of manipulating stock prices.”

As if the court’s authenticity was hidden

It is reported that HLB received a notification that he would receive prosecution measures after deliberation by the Capital Market Research Deliberation Committee. This issue is ahead of a decision by the Securities and Futures Commission (Jungseon Committee). If the action to notify the prosecution is confirmed by the Jeungseon Committee, the authenticity is expected to be covered by the court.

HLB is hoping to open an extension committee as soon as possible to resolve the uncertainty. It means that he will clarify his position on Jeungseon. If it leads to a legal battle after the prosecution’s charges, he is confident in proving his innocence. It is explained that the clinical success announcement was judged by Covington, a law firm in the United States, to which experts from the FDA belong, and the opinions of experts from HLB’s Science and Technology Advisory Group (SAB) were included.

An HLB official said, “The information on the’failure in fact’ mentioned by the financial authorities is that the FDA has made an opinion on some of the data for the entire survival period,” said an official of HLB. “Afterwards, through a face-to-face meeting with the FDA, all misunderstandings were resolved, and additional data It is a situation that is giving out” he said.

In particular, HLB said that in the case of the 4th patient, 40% (180) of all clinical patients in the phase 3 clinical trial, all indicators including overall survival (OS) data, the primary efficacy indicator, were sufficient for new drug approval. Insist. The total survival period refers to the period from the patient’s initiation of treatment to death. It is considered as the most important indicator for new drug approval, along with progression-free survival (PFS), which is the period during which the tumor condition does not worsen during drug administration. In the case of using the 4th treatment rather than the 3rd treatment, all the data is well and there is no problem with the approval of the new drug.

An HLB official also stressed, “The European Cancer Society (ESMO), a world-renowned cancer society, has selected riboseranib’s global clinical phase 3 result as the best paper among the 3904 papers submitted.” “Chairman Jin said at a press conference on the 16th that he was conservatively speaking, but he plans to actively refute it in the future.

There is also a prospect that the controversy will continue for many years. Nature Cell Ra Jung-chan was handed over to trial for manipulating stock prices using false information.(8,340 -1.77%) On the 7th, the president was acquitted at the first trial. This is the result of two and a half years after being handed over to trial in August 2018.