Shinpoong Pharmaceutical, once a frontrunner in the race to develop a COVID-19 treatment, has hit a roadblock as its candidate drug, Pyramax, failed to meet success criteria in phase 3 clinical trials. The trial results revealed no statistically significant difference between Pyramax and a placebo in terms of severe cases, which include hospitalizations or fatalities. The company stated that a detailed analysis of efficacy and safety is underway, and decisions on future development will be based on these findings.
This development marks a significant setback for Shinpoong Pharmaceutical, which had embarked on the journey of repurposing Pyramax, originally a malaria treatment, as a potential COVID-19 therapy. The endeavor spans over 42 months, commencing with the application for clinical trial designation in April 2020. The company allocated substantial investments, amounting to 14.7 billion won in 2021 and 17.6 billion won in the preceding year, for the clinical trials of Pyramax. In the first half of this year alone, an additional 23.2 billion won was earmarked for the initiative.
At its zenith, Shinpoong Pharmaceutical’s market capitalization surpassed 10 trillion won, driven by its pursuit of COVID-19 treatments. The company’s stock price experienced a meteoric rise, soaring from approximately 7,000 won pre-pandemic to an astonishing 214,000 won in September 2020, signifying a 27-fold increase. However, the shift towards an endemic phase dampened these gains, with the stock price plummeting by 18.9% to 11,030 won upon the announcement of phase 3 trial failure.
This development coincided with allegations of illicit stock price manipulation and embezzlement, culminating in a clash with minority shareholders. In September 2020, Shinpoong Pharmaceutical garnered a profit of 215.4 billion won by selling its own shares at the peak of its valuation, a stark contrast to its operating profit of 5.6 billion won in 2019. The company was embroiled in controversy last year when a senior executive faced scrutiny for allegedly establishing a slush fund. Moreover, just last month, the Financial Services Commission initiated a mandatory inquiry into suspicions of insider trading. The turn of events underscores the complexities and challenges inherent in drug development, underscoring the need for cautious optimism in the pursuit of medical breakthroughs.
